----

**6681859      CANADA INC.**

**-      and -**

**ALLIANCE      ATLANTIS COMMUNICATIONS INC.**

**ARRANGEMENT      AGREEMENT**

**JANUARY      **
**10**
**,**
**2007**

----

**TABLE            OF            CONTENTS**

**Page**

ARTICLE      1

|     INTERPRETATION |                                                         |                                             2  |
|----------------------------------------|--------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     1.1            | Definitions                                                  |                                             2  |
|     1.2            | Interpretation                Not Affected by Headings, etc. |                                             13 |
|     1.3            | Currency                                                     |                                             13 |
|     1.4            | Number,                etc.                                  |                                             13 |
|     1.5            | Statutory                References                          |                                             14 |
|     1.6            | Date                for Any Action                           |                                             14 |
|     1.7            | Prior                Written Notices                         |                                             14 |
|     1.8            | Schedules                                                    |                                             14 |

|     THE                ARRANGEMENT |                                                   |             15 |
|--------------------------------------------------------|--------------------------------------------------------|----------------------------------------------------------------------------|
|     2.1                            | Implementation                Steps by the Corporation |             15 |
|     2.2                            | Interim                Order                           |             15 |
|     2.3                            | The                Arrangement                         |             16 |
|     2.4                            | Circular                                               |             16 |
|     2.5                            | Deposit                of Funds by Acquireco           |             16 |
|     2.6                            | Preparation                of Filings                  |             16 |
|     2.7                            | Dissenting                Shareholders                 |             18 |
|     2.8                            | Holdco                Alternative                      |             18 |

|     REPRESENTATIONS                AND WARRANTIES |                                                             |             19 |
|-----------------------------------------------------------------------|------------------------------------------------------------------|----------------------------------------------------------------------------|
|     3.1                                           | Representations                and Warranties of the Corporation |             19 |
|     3.2                                           | Representations                and Warranties of Acquireco       |             28 |
|     3.3                                           | Investigation                                                    |             29 |
|     3.4                                           | Survival                                                         |             29 |

|     REGULATORY                APPROVALS |                                |             29 |
|-------------------------------------------------------------|-------------------------------------|----------------------------------------------------------------------------|
|     4.1                                 | Applications                        |             29 |
|     4.2                                 | Competition                Approval |             30 |

|     COVENANTS |                                                                        |             30 |
|-----------------------------------|-----------------------------------------------------------------------------|----------------------------------------------------------------------------|
|     5.1       | Covenants                of the Corporation                                 |             30 |
|     5.2       | Covenants                of Acquireco                                       |             39 |
|     5.3       | Covenants                Regarding Non-Solicitation                         |             40 |
|     5.4       | Notice                by the Corporation of Superior Proposal Determination |             40 |
|     5.5       | Closing                Matters                                              |             40 |
|     5.6       | Cooperation                regarding Reorganization                         |             40 |

**TABLE          OF          CONTENTS**

**Page**

|     CONDITIONS |                                                                                 |             40 |
|------------------------------------|--------------------------------------------------------------------------------------|----------------------------------------------------------------------------|
|     6.1        | Mutual                Conditions Precedent                                           |             40 |
|     6.2        | Additional                Conditions Precedent to the Obligations of Acquireco       |             41 |
|     6.3        | Additional                Conditions Precedent to the Obligations of the Corporation |             42 |
|     6.4        | Notice                and Cure Provisions                                            |             42 |
|     6.5        | Satisfaction                of Conditions                                            |             43 |

|     TERMINATION,                AMENDMENT AND WAIVER |                                         |             43 |
|--------------------------------------------------------------------------|----------------------------------------------|----------------------------------------------------------------------------|
|     7.1                                              | Termination                                  |             43 |
|     7.2                                              | Effect                of Termination         |             44 |
|     7.3                                              | Expenses                                     |             45 |
|     7.4                                              | Acquireco                Termination Payment |             45 |
|     7.5                                              | Amendment                                    |             45 |
|     7.6                                              | Waiver                                       |             45 |

|     GENERAL |                                                   |                                                                             |
|---------------------------------|--------------------------------------------------------|----------------------------------------------------------------------------------|
|     8.1     | Notices                                                |                      |
|     8.2     | Assignment                                             |             48       |
|     8.3     | Binding                Effect                          | 48                                                                               |
|     8.4     | No                Other Warranties                     |              48 |
|     8.5     | Separate                Warranties                     |              48 |
|     8.6     | Entire                Agreement                        |              48 |
|     8.7     | Remedies                and Waivers                    |              48 |
|     8.8     | No                Personal Liability                   |              48 |
|     8.9     | Control                of Other Party’s Business |              48 |
|     8.10    | Indemnification                                        |              48 |
|     8.11    | Further                Assurances                      |              49 |
|     8.12    | Public                Statements                       |              49 |
|     8.13    | Governing                Law                           |              49 |
|     8.14    | Invalidity                of Provisions                |              49 |
|     8.15    | Counterparts                                           |              49 |

----

**ARRANGEMENT      AGREEMENT**

**THIS      AGREEMENT**

**BETWEEN:**

**6681859      CANADA INC.,**
**Acquireco**

**ALLIANCE      ATLANTIS COMMUNICATIONS INC.**
**Corporation**

**WHEREAS**

**WHEREAS**

**WHEREAS**

**WHEREAS**

**WHEREAS**

**WHEREAS**
**CanWest**
**CanWest      Guarantee**

**WHEREAS**
**GSCP**
**GSCPO**
**GSCPG**
**GS Guarantors**
**Guarantors**
**GSCP      Guarantee**
**Guarantees**

----

**NOW      THEREFORE THIS AGREEMENT WITNESSES THAT**

**ARTICLE      1**

**INTERPRETATION      **

| **1.1** | **Definitions** |
|---------|-----------------|

**Acquireco      Disclosure Letter**

**Acquireco      Termination Payment**
0

**Acquisition      Proposal**

**Acquisition      Proposal Assessment Period**
0

**affiliate**

|   | (a) | one                of them is the subsidiary of the other;                or |
|--------|-----|------------------------------------------------------------------------------|

|   | (b) | each                of them is Controlled by the same                Person; |
|--------|-----|------------------------------------------------------------------------------|

**Alternative      Debt Financing**

**Arm’s      Length**

----

**Arrangement**

**Articles      of Arrangement**

**Board**
**Board of Directors**

**Books      and Records**

**Bridge      Financing**
0

**Broadcasting      Legislation**
*Broadcasting Act *
*Radiocommunication Act *

**Business      Day**

**Canadian      GAAP**
0

**CanWest**

**CanWest      Guarantee**

**Cash      Amount**

**CBCA**
*Canada Business Corporations Act*

**Circular**

**Class      A Shareholder**

**Class      A Shares**

**Class      B Shareholder**

**Class      B Shares**

----

**Closing      Date**

**Commissioner**

**Compensation      Plans**
**MPDLP**

**Competition      Act**
*Competition Act*

**Competition      Act Clearance**

|   | (a) | the                issuance of an advance ruling certificate (“**ARC**”) by the                Commissioner under section 102(1) of the Competition Act, in form                and                substance satisfactory to Acquireco acting reasonably, to the effect                that                the Commissioner is satisfied that the Commissioner would not have                sufficient grounds upon which to apply to the Competition Tribunal                for an                order under section 92 of the Competition Act with respect to the                completion of the Arrangement and which ARC shall remain in force,                unamended, at the Effective Date;                or |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | the                applicable waiting period under section 123 of the Competition Act                shall                have expired or been earlier terminated or waived and the Commissioner                shall have advised Acquireco in writing (which advice will not have                been                rescinded at the Effective Date) that the Commissioner is of the                view that                there are not sufficient grounds to initiate proceedings before the                Competition Tribunal under the merger provisions of the Competition                Act in                respect of the completion of the Arrangement and such written                communication does not contain any conditions, restrictions or                requirements (other than the normal caveat that such proceedings                may be                initiated at any time up to three years after the transactions have                been                substantially completed) that are not satisfactory to Acquireco acting                reasonably; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Competition      Authorities**

----

**Competition      Laws**

**Competition      Tribunal**
*Competition Tribunal Act*

**Confidentiality      Agreements**

**Confidential      Material Contracts**
0

**Contemplated      Transactions**

**Control**
**first Person**
**second Person**

|   | (a) | the                first Person, directly or indirectly, beneficially owns or exercises                control or direction over securities of the second Person carrying                votes                which, if exercised, would entitle the first Person to elect a majority                of                the directors of the second Person, unless that first Person holds                the                voting securities only to secure an                obligation; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | the                second Person is a partnership, other than a limited partnership,                and the                first Person holds more than 50% of the interests of the partnership;                or |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | the                second Person is a limited partnership and the general partner of                the                limited partnership is the first                Person; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Corporation      Expenses**

**Corporation      Information**

**Corporation      Intellectual Property**

**Corporation’s      Documents**
0

----

**Court**

**CRTC**

**CRTC      Approval**

**CRTC**
**Regulated      Companies**

**CSAs**

**Debt      Commitment Letter**
0

**Debt      Financing**
0

**Debt      Receipt Failure**
0

**Depositary**

**Director**

**Disclosure      Letter**

**Dissent      Rights**

**Effective      Date**

**Effective      Time**

**Employee      Plans**
0

**ERISA**
*Employee Retirement Income Security Act of      1974*

**Exclusivity      Agreement**

**Fairness      Opinion**

----

**Filed      CSA Documents**

**Final      Order**

**Financial      Statements**

**Financing**
0

**Financing      Agreements**
0

**Funding      Commitment Letter**
0

**Governmental      Entity**

**GS      Guarantors**

**GSCP**

**GSCPG**

**GSCPO**

**GSCP      Guarantee**

**Guarantor**
**Expenses**

**Guarantor      Representatives**
0

**Guarantors**

**High      Yield Financing**
0

----

**Holdco      Agreement**
0

**Holdco      Alternative**
0

**Holdco      Election Date**
0

**HSR      Act**
*Hart-Scott-Rodino Antitrust Improvements Act of      1976*

**HSR      Clearance**

**Initial      Financing**
0

**Intellectual      Property**

**Inter-Affiliate      Transfer**

**Interim      Order**
0

**Investment      Canada Act**
*Investment Canada Act*

**knowledge      of the Corporation**

**Laws**
** **

**Licensed      Intellectual Property**

**Liens**

**Marketing      Period**

----

**Material      Adverse Change**
**Material Adverse Effect**
** **

**Material      Contract**

|   | (i) | long-term                and bank indebtedness; |
|--------|-----|-------------------------------------------------|

|   | (ii) | co-ownership,                joint venture, partnership or other revenue-sharing                arrangements; |
|--------|------|---------------------------------------------------------------------------------------------------------------|

|   | (iii) | program                supply, including any agreements with respect to Licensed Intellectual                Property; |
|--------|-------|------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | distribution                or carriage agreements; |
|--------|------|-----------------------------------------------------|

|   | (v) | shareholder                agreements, unanimous shareholder declarations or voting trust, pooling                or                transfer agreements; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | put                or call agreements relating to equity securities of the Corporation,                other                than where such agreement forms part of an Employee                Plan; |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | Score                Media Inc.; |
|--------|-------|----------------------------------|

|   | (viii) | non-competition                agreements or other agreements containing restrictions on the business                that may be carried on by the Corporation and its                subsidiaries; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ix) | financial                risk management contracts, such as currency, commodity or interest                related                hedge contracts; |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x) | the                lease for the Corporation’s head office at 121 Bloor Street East;                and |
|--------|-----|---------------------------------------------------------------------------------------------------------------|

|   | (xi) | to                the extent not included in any of clauses (i) through (x) above,                any                contract outside the ordinary course of business of the Corporation                or its                Material Subsidiaries, as the case may                be; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**material      fact**

**Material      Subsidiaries**
0

**Meeting**

**Offering      Documents**
0

**Options**

**OSC**

**Other      Competition Act Approvals**

**Outside      Date**
0

**Permits**
0

**Person**

**Plan      of Arrangement**

----

**Proceedings**
0

**Purchase      Rights**

**Qualifying      Holdco**
0

**Qualifying      Holdco Shareholders**
0

**Receivables      Financing**
0

**Regulatory      Approvals**

**Required      Financial Information**
0

**Rule      144A**

**SEC**

**Securities      Act**
*Securities Act*

**Shareholder**

**Shares**

**SHS**

**Special      Resolution**

**Specified      Person**
0

**subsidiary**

**Sumac**

**Superior      Proposal**
*bona fide*

----

0

**Supplemental      Disclosure Letter**

**Tax      Act**
*Income Tax Act*

**Tax      Returns**

**Taxes**

**Term      Loan Financing**
0

**Termination      Payment**

**Third      Party Acquisition**

----

**Trade-marks**

**Trust      Agreement**

**Trust      Arrangements**

**Trustee**

**US      Securities Act**

**Voting      Agreement**

| **1.2** | **Interpretation                Not Affected by Headings, etc.** |
|---------|------------------------------------------------------------------|

| **1.3** | **Currency** |
|---------|--------------|

| **1.4** | **Number,                etc.** |
|---------|---------------------------------|

*vice versa*

----

| **1.6** | **Date                for Any Action** |
|---------|----------------------------------------|

| **1.7** | **Prior                Written Notices** |
|---------|------------------------------------------|

| **1.8** | **Schedules** |
|---------|---------------|

| Schedule | Description                               |
|----------|-------------------------------------------|
| 1.1(a)   | CRTC                Regulated Companies   |
| 5.1(k)   | ERISA                Compliance Companies |

**ARTICLE      2**

**THE      ARRANGEMENT **

| **2.1** | **Implementation                Steps by the Corporation** |
|---------|------------------------------------------------------------|

|   | (a) | as                soon as reasonably practicable, apply to the Court under section                192(4) of                the CBCA for the Interim Order, and thereafter proceed with and diligently                pursue the obtaining of the Interim Order, in all cases acting in                a manner                acceptable to Acquireco, acting                reasonably; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | call                and hold the Meeting as soon as practicable after the date of this                Agreement, but in any event by April 30, 2007, or such other date                as                Acquireco and the Corporation may agree in writing, for the purpose                of                considering the Special Resolution (and, with the consent of Acquireco,                for any other proper purpose as may be set out in the notice for                such                meeting); |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | except                as required for quorum purposes, not adjourn (except as required                by                applicable Law), postpone, cancel (or propose the adjournment,                postponement or |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | cancellation                of) or fail to call the Meeting without the Acquireco’s written                consent; |
|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | (d) | use                commercially reasonable efforts to solicit from Shareholders proxies                in                favour of the Special Resolution, including, if so requested by Acquireco                and at its expense, using the services of dealers and proxy solicitation                services; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | subject                to obtaining the approvals required by the Interim Order, as soon                as                reasonably practicable after the Meeting, apply to the Court under                section                192(3) of the CBCA for the Final Order, and thereafter proceed with                and                diligently pursue the obtaining of the Final Order, in all cases                acting in                a manner acceptable to Acquireco, acting                reasonably; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | subject                to obtaining the Final Order and the satisfaction or waiver of the                conditions contained herein in favour of each party, on the Closing                Date                send to the Director for endorsement and filing the Articles of                Arrangement and such other documents as may be required in connection                therewith under section 192(6) of the CBCA to give effect to the                Arrangement; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | instruct                counsel acting for it to bring the applications referred to in sections00 and00                in cooperation                with counsel to Acquireco; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | permit                Acquireco and its counsel to review and comment upon drafts of all                material to be filed by the Corporation with the Court in connection                with                the Arrangement prior to the service and filing of that material                and give                reasonable consideration to such comments and all information regarding                the Arrangement and Acquireco; the Corporation shall also provide                counsel                to Acquireco on a timely basis copies of any notice of appearance                and                evidence served on the Corporation or its counsel in respect of the                application for the Final Order or any appeal therefrom and of any                notice                (written or oral) received by the Corporation indicating any intention                to                appeal the Final Order; and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | not                (i) file any material with the Court in connection with the Arrangement                or                serve any such material, and not agree to modify or amend materials                so                filed or served, or (ii) send to the Director, for endorsement and                filing                by the Director, the Articles of Arrangement, except in either case                as                contemplated hereby or with Acquireco’s prior written consent, such                consent not to be unreasonably withheld or                delayed. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **2.2** | **Interim                Order** |
|---------|----------------------------------|

0

|   | (a) | for                the class of Persons to whom notice is to be provided in respect                of the                Arrangement and the Meeting and for the manner in which such notice                is to                be provided; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | that                the requisite Shareholder approval for the Special Resolution shall                be                two-thirds of the votes cast on the Special Resolution by the Class                A                Shareholders and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | the                Class B Shareholders present in person or represented by proxy at                the                Meeting, each voting separately as a class (provided, however, that                the                requisite shareholder approval, and approval of any other parties,                is                subject to the discretion of the                Court); |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | that,                in all other respects, the terms, restrictions and conditions of                the                by-laws and articles of the Corporation, including quorum requirements                and                all other matters, shall apply in respect of the                Meeting; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | for                the grant of the Dissent Rights;                and |
|--------|-----|------------------------------------------------------------------------|

|   | (e) | for                the notice requirements with respect to the presentation of the                application to the Court for the Final                Order. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **2.3** | **The                Arrangement** |
|---------|------------------------------------|

0
0

| **2.4** | **Circular** |
|---------|--------------|

|   | (a) | As                promptly as reasonably practicable after the execution of this Agreement,                the Corporation shall prepare and complete, in consultation with                Acquireco, the Circular together with any other documents required                by the                CBCA, the Securities Act and other applicable Laws in connection                with the                Meeting and the Arrangement, and the Corporation shall, as promptly                as                practicable after obtaining the Interim Order, cause the Circular                and                other documentation required in connection with the Meeting to be                sent to                each Shareholder and beneficial holder of Shares and filed as required                by                the Interim Order and applicable                Laws. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | The                Corporation shall ensure that the Circular complies with all applicable                Laws and, without limiting the generality of the foregoing, the                Corporation shall ensure that the Circular provides Shareholders                with                information in sufficient detail to permit them to form a reasoned                judgment concerning the matters to be placed before them at the Meeting.                The Corporation covenants that the information to becontained in                the                Circular or any amendment thereto (including any information referred                to                therein or incorporated therein by reference), other than information                furnished to the Corporation by Acquireco, will be complete in all                material respects as at the date thereof and will not contain any                untrue                statement of a material fact or omit to state a material fact required                to                be stated therein or necessary to make the statements contained therein                not misleading in light of the circumstances in which they are                made.  The Corporation shall permit Acquireco and its counsel to                review and comment on drafts of the Circular and other documents                referred                to above in the course of its preparation and shall consider in good                faith                Acquireco’s comments thereon. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Acquireco                covenants to furnish to the Corporation, on a timely basis, all                information requested by the Corporation that may be required under                applicable Laws to be contained in the Circular or any amendment                thereto                relating to Acquireco and the Guarantors, and Acquireco covenants                that all                such information (including any information referred to therein or                incorporated therein by reference) will be complete in all material                respects as at the date thereof and will not contain any untrue statement                of a material fact or omit to state a material fact required to be                stated                therein or necessary to make the statements contained therein not                misleading in light of the circumstances in which they are                made. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Each                of the Corporation and Acquireco shall promptly notify each other                if at                any time before the Effective Time it becomes aware that the Circular                contains an untrue statement of a material fact or omits to state                a                material fact required to be stated therein or necessary to make                the                statements contained therein not misleading in light of the circumstances                in which they are made, or that otherwise requires an amendment or                supplement to the Circular, and the parties shall co-operate in the                preparation of such amendment or supplement as                required. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **2.5** | **Deposit                of Funds by Acquireco** |
|---------|--------------------------------------------------|

| **2.6** | **Preparation                of Filings** |
|---------|-------------------------------------------|

|   | (a) | Acquireco                and the Corporation shall cooperate                in: |
|--------|-----|---------------------------------------------------------------------------------|

|   | (i) | the                preparation of any documents reasonably deemed by Acquireco or the                Corporation to be necessary to discharge their respective obligations                under applicable Laws (other than the Regulatory Approvals) in connection                with the Arrangement and all other matters contemplated by this Agreement;                and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ii) | Acquireco                and the Corporation shall cooperate in the taking of all such action                as                may be required under applicable Laws in connection with the Arrangement                and all other matters contemplated by this                Agreement. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Each                of the parties shall furnish to the other party, on a timely basis,                all                information as may be required to effectuate the foregoing actions,                and                each covenants that, to its knowledge, no information so furnished                by it                in writing in connection with those actions or otherwise in connection                with the consummation of the actions contemplated by this Agreement                will                contain any untrue statement of a material fact or omit to state                a                material fact required to be stated therein or necessary to make                the                statements contained therein not misleading in light of the circumstances                in which they are made (other than with respect to any information                relating to and provided by the other or any third party that is                not an                affiliate of one of the parties). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Each                of the Corporation and Acquireco shall promptly notify each other                if at                any time before the Effective Time it becomes aware that an application                for any order, registration, consent, ruling, exemption, no-action                letter                or approval in connection with the Arrangement or this Agreement,                or any                other filing under applicable Laws (other than Competition Laws)                contains                an untrue statement of a material fact or omits to state a material                fact                required to be stated therein or necessary to make the statements                contained therein not misleading in light of the circumstances in                which                they are made, or that otherwise requires an amendment or supplement                to                such application or filing, and the parties shall co-operate in the                preparation of such amendment or supplement as                required. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | The                Corporation and Acquireco shall co-operate in the preparation of                presentations, if any, to investors regarding the Arrangement, and                no                party shall issue any press release or other public disclosure document                with respect to this Agreement or the Arrangement (other than its                regular                interim and annual continuous disclosure documents, provided no reference                is made to this Agreement or the Arrangement in such documents other                than                as previously disclosed) without the consent of the other party (which                shall not be unreasonably withheld) and the Corporation shall not                make any                filing with any Governmental Entity with respect thereto (other than                the                Competition Authorities and the Corporation’s regular interim and annual                continuous disclosure documents) without the consent of Acquireco                (which                shall not be unreasonably withheld) and Acquireco shall not make                any                filing with any Governmental Entity (other than the Competition                Authorities) in connection with the Arrangement without the consent                of the                Corporation (which shall not be unreasonably withheld); provided,                however,                that the foregoing shall be subject to each party’s overriding obligation                to make any disclosure or filing required under applicable Laws,                and the                party making such disclosure shall use all commercially reasonable                efforts                to give prior oral or written notice to each other party and reasonable                opportunity to review or comment on the disclosure or filing, and                if such                prior notice is not possible, to give such notice immediately following                the making of such disclosure or filing.  This clause 2.6(d)                shall not apply to Movie Distribution Income Fund, Motion Picture                Distribution Inc. or Motion Picture Distribution                LP. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | **2.7** | **Dissenting                Shareholders** |
|--------|---------|--------------------------------------------|

| **2.8** | **Holdco                Alternative** |
|---------|---------------------------------------|

|   | (a) | Subject                to receipt of all required regulatory approvals, Acquireco will permit                Persons **(**“**Qualifying Holdco                Shareholders**”) who are, (a) resident in Canada for purposes of                the Tax Act (including a partnership if all of the members of the                partnership are resident in Canada), and (b) registered and beneficial                owners of Shares (directly or indirectly through a Qualifying Holdco)                as                of the date of this Agreement, and (c) shareholders of a corporation                that                meets the conditions described below in this section 0 (a “**Qualifying Holdco**”) to                elect in respect of such Shares (or Shares held by such Qualifying                Holdco), by notice in writing provided to Acquireco (or the Depositary)                not later than 5:00 p.m. (Toronto time) on the 10th  Business                Day prior to the Effective Date (the “**Holdco Election                Date**”), to sell such Shares through a Qualifying Holdco (the                “**Holdco Alternative**”) provided                that: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | such                Qualifying Holdco was incorporated under the CBCA not earlier than                a date                acceptable to Acquireco or will be continued under the                CBCA; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | such                Qualifying Holdco is a single purpose corporation that has not carried                on                any business, has no employees and has not held and does not hold                any                assets other than Shares and a nominal amount of                cash; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | at                the Effective Time, such Qualifying Holdco has no liabilities or                obligations of any kind whatever (except to Acquireco and the Corporation                under the terms of the Holdco Alternative and the Voting                Agreements); |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | such                Qualifying Holdco shall have been the sole legal and beneficial owner                of                such Shares since February 15, 2007, or such later date as Acquireco                may                determine in its sole discretion; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | at                all times such Qualifying Holdco is a resident of Canada for the                purposes                of the Tax Act and is not a resident of the United States and has                no                taxable presence in the United                States; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | all                Qualifying Holdco Shareholders will be required to employ the same                form of                Holdco Alternative, which shall be a Holdco acquisition                model; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | such                Holdco Alternative will be completed in accordance with applicable                Laws                (including securities Laws) at or prior to the Effective                Time; |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (viii) | the                Qualifying Holdco Shareholder and, if applicable, its shareholder                and/or                the ultimate principal investor of the Qualifying Holdco Shareholder                will                be required to provide a comprehensive indemnity in favour of Acquireco                and the Corporation, on terms satisfactory to Acquireco, acting                reasonably, in respect of (A) any liabilities of such Qualifying                Holdco                relating to any matter occurring on or before the Effective Time,                and (B)                any breach by the Qualifying Holdco Shareholder, and where applicable,                its                shareholder and/or the ultimate principal investor of the Qualifying                Holdco Shareholder, of any representation, warranty, obligation or                covenant of the Qualifying Holdco Shareholder, its shareholder and/or                the                ultimate principal investor of such Qualifying Holdco Shareholder,                as the                case may be, to Acquireco and the Corporation.  For greater                certainty, the term “liabilities” for purposes of this subsection 0 shall include any and all claims,                demands,                proceedings, losses, damages, liabilities, deficiencies, costs and                expenses (including legal and other professional fees), interest,                penalties and Taxes suffered or incurred by Acquireco, the Corporation                and                such Qualifying Holdco, as                applicable; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ix) | the                entering into or implementation of the Holdco Alternative will not                result                in any delay in completing any other transaction contemplated by                this                Agreement; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x) | the                Qualifying Holdco Shareholder will be required to pay all of the                reasonable out-of-pocket expenses incurred by Acquireco, such Qualifying                Holdco and the Corporation in connection with the Holdco Alternative,                including any reasonable costs associated with any due diligence                conducted                by Acquireco; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xi) | access                to the books and records of such Qualifying Holdco shall have been                provided on or before 15 Business Days prior to the Effective Time                and                Acquireco and its counsel shall have completed their due diligence                regarding the business and affairs of such Qualifying Holdco;                and |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xii) | the                terms and conditions of such Holdco Alternative must be satisfactory                to                Acquireco and the Corporation, acting reasonably, and must include                representations and warranties which are satisfactory to Acquireco,                acting                reasonably. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Any                Qualifying Holdco Shareholder who elects the Holdco Alternative will                be                required to make full disclosure to Acquireco of all transactions                involved                in such Holdco Alternative.  In the event that the terms and                conditions of such Holdco Alternative or any transactions involved                in the                Holdco Alternative are not satisfactory to Acquireco, acting reasonably,                or the CSAs, Acquireco will use its commercially reasonable efforts,                for a                period not to exceed 15 Business Days, to assist the Corporation                in                structuring an alternative transaction in a manner satisfactory to                Acquireco, acting reasonably.  In the event that the terms and                conditions of or the transactions involved in such Holdco Alternative                are                not satisfactory to Acquireco, acting reasonably, and no alternative                transactionsatisfactory to Acquireco, acting reasonably, can be agreed                upon despite Acquireco having used its commercially reasonable efforts,                no                Holdco Alternative shall be offered and the other transactions                contemplated by this Agreement shall be completed subject to the                other                terms and conditions hereof. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Each                Qualifying Holdco Shareholder that has elected the Holdco Alternative                will                be required to enter into a share purchase agreement (the “**Holdco                Agreement**”) providing for the acquisition of all issued and                outstanding shares of the Qualifying Holdco in a form consistent                with the                foregoing.  Failure of any Qualifying Holdco Shareholder to                properly elect the Holdco Alternative on or prior to the Holdco Election                Date or failure of any Qualifying Holdco Shareholder to properly                enter                into a Holdco Agreement will disentitle such Qualifying Holdco Shareholder                from the Holdco Alternative. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      3**

**REPRESENTATIONS      AND WARRANTIES **

| **3.1** | **Representations                and Warranties of the                Corporation** |
|---------|-------------------------------------------------------------------------------------|

|   | (a) | Organization. |
|--------|-----|---------------|

|   | (i) | The                Corporation and each of its Material Subsidiaries has been duly                incorporated under the Laws of its jurisdiction of incorporation,                is                validly existing and has full corporate power and capacity to own                or lease                its properties and assets and conduct its business as currently owned                and                conducted.  The Corporation has disclosed in section 000                of the Disclosure Letter the names and                jurisdictions of incorporation of each of its Material                Subsidiaries. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | All                the outstanding shares in the capital of each Material Subsidiary                have                been validly issued and are fully paid and non-assessable and, except                as                set forth in section 000                of the                Disclosure Letter, are as of the date of this Agreement owned by                the                Corporation, by another subsidiary of the Corporation or by the                Corporation and another subsidiary, free and clear of all Liens.                Except                for its interests in its subsidiaries and except for the ownership                interests set forth in section 000                of the                Disclosure Letter and ownership of interests in entities, the ownership                of                which is not material to the Corporation, the Corporation does not                as of                the date of this Agreement own, directly or indirectly, any shares,                capital stock, membership interest, partnership interest, joint venture                interest or other equity interest in any                Person. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | Articles                of Incorporation and Bylaws*.*  The Corporation                Information contains a complete and correct copy of the Articles                of                Incorporation and Bylaws or equivalent organizational documents,                each as                amended to the date of this Agreement, of the Corporation and each                of its                Material Subsidiaries. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Capitalization. |
|--------|-----|-----------------|

|   | (i) | The                authorized capital of the Corporation consists of an unlimited number                of                Class A Shares and Class B Shares. As at December 31, 2006, there                were                1,005,438 Class A Shares and 40,145,955 Class B Shares issued and                outstanding, and Options to acquire 1,780,450 Class B Shares, Purchase                Rights to acquire 6,689 Class B Shares (3,185 of which Class B Shares                are                issued and outstanding), restricted stock units in respect of 60,025                Class                B Shares and, other than as disclosed in section 00 of the                Disclosure Letter, deferred stock units in respect of 148,577 Class                B                Shares have been granted and are outstanding.  Except for such                Options, Purchase Rights, restricted stock units and deferred stock                units,                the rights of the Class A Shareholders to convert their shares into                Class                B Shares and the rights of the Class B Shareholders to convert their                shares into Class A Shares, in each case in accordance with their                terms,                there are no agreements, options, rights, warrants, rights of conversion                or other rights pursuant to which the Corporation or any of its                subsidiaries is, or may become, obligated to issue any shares or                any                securities convertible or exchangeable, directly or indirectly, into                any                shares of the Corporation or any of its subsidiaries.  All of                the outstanding Shares in the capital of the Corporation are validly                issued, fully paid and non-assessable and have been issued in compliance                with all applicable Laws. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | There                are no bonds, debentures, notes or other indebtedness of the Corporation                having the right to vote (or convertible into, or exchangeable for,                securities having the right to vote) on the Arrangement or on any                other                matters on which Shareholders may                vote. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Authority                and No Violation. |
|--------|-----|--------------------------------------------|

|   | (i) | The                Corporation has the requisite corporate power and capacity to execute                and                deliver this Agreement and to perform its obligations hereunder and                to                complete the Arrangement. The execution, delivery and performance                of this                Agreement by the Corporation and the completion of the Arrangement                by the                Corporation have been duly authorized by its Board of Directors and                no                other corporate proceedings on its part are necessary to authorize                the                execution, delivery and performance of this Agreement or the completion                of                the Arrangement by the Corporation other than the approval of the                Circular                by the Board of Directors and the calling of the Meeting and the                receipt                of approval of the Shareholders required by the Interim Order and                the                approval of the Court. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ii) | This                Agreement has been duly executed and delivered by the Corporation                and                constitutes its legal, valid and binding obligation, enforceable                against                it in accordance with its terms, subject to bankruptcy, insolvency                and                other Laws affecting creditors’ rights generally and to general principles                of equity. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | The                Board of Directors has (i) received an oral Fairness Opinion (to                be                followed by a written Fairness Opinion); and (ii) after receiving                the                recommendation of a special committee of directors formed for the                purpose                of, among other things, considering this Agreement and the Arrangement                and                after consultation with its financial and outside legal advisors                (A)                determined unanimously (except for directors abstaining because of                conflict of interests) that the consideration offered under the                Arrangement for each Share is fair from a financial point of view                to the                Shareholders and that the entering into of this Agreement and the                completion of the Arrangement are in the best interests of the                Corporation; and (B) determined unanimously (except for directors                abstaining because of conflict of interests) to recommend that the                holders                of the Shares vote in favour of the Arrangement.  As of the date                hereof, all of the Directors have advised that they intend to vote                all                Shares held by them in favour of the Special Resolution and the Circular                will so state. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | The                execution and delivery of this Agreement by the Corporation do not,                and                the consummation of the Arrangement and the performance of this Agreement                by the Corporation will not: |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (A) | conflict                with or violate the Articles of Incorporation or Bylaws or equivalent                organizational documents of the Corporation or any of its                subsidiaries; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | assuming                that all consents, approvals, authorizations and other actions described                in section 000                have been obtained and that all filings and                obligations described in section 000                have been made,                conflict with or violate any Law applicable to the Corporation or                any of                its subsidiaries or by which any property or asset of the Corporation                or                any of its subsidiaries is bound;                or |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (C) | except                as set forth in section 000                of the                Disclosure Letter, result in any breach of, or constitute a default                (or an                event which, with notice or lapse of time or both, would become a                default)                under, or give to others any right of termination, amendment, acceleration                or cancellation of, or create, give rise to or change any rights                or                obligations of any Person under, or result in the creation of a Lien                on                any property or asset of the Corporation or any of its subsidiaries                pursuant to any note, bond, mortgage, indenture, contract, agreement,                lease, license, permit, franchise or other instrument or obligation                to                which the Corporation or any of its Material Subsidiaries is a party                or by                which the Corporation or anyof its Material Subsidiaries or any property                or asset of the Corporation or any of its Material Subsidiaries is                bound; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | Except                as set out in section 00 of the                Disclosure Letter, no consent,                approval, license, permit, order or authorization of, or registration,                declaration or filing with, or permit from, any Governmental Entity                is                required to be obtained or made by or with respect to the Corporation                or                any of its subsidiaries in connection with the execution, delivery                and                performance of this Agreement or the consummation of the Arrangement,                other than: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (A) | the                Interim Order and the Final Order and any approvals required                thereby; |
|--------|-----|---------------------------------------------------------------------------------------------------------|

|   | (B) | filings                with the Director under the CBCA, with the Toronto Stock Exchange                and                under provincial securities                legislation; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (C) | the                Regulatory Approvals relating to the Corporation;                and |
|--------|-----|-----------------------------------------------------------------------------------------|

|   | (D) | those,                which if not obtained, could not individually or in the aggregate                be                reasonably expected to be material to the                Corporation. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Compliance                with Law. |
|--------|-----|-------------------------------------|

|   | (i) | The                Corporation and each of its Material Subsidiaries is duly qualified                to                carry on business in each jurisdiction in which the character of                its                properties and assets, owned or leased, or the nature of its business                makes such qualification necessary, except where the failure to be                so                qualified could not reasonably be expected to have a Material Adverse                Effect. The Corporation and each of its Material Subsidiaries is                in                possession of all franchises, grants, authorizations, licenses, permits,                easements, variances, exceptions, consents, certificates, approvals                and                orders of any Governmental Entity necessary for each of the Corporation                or                any of its Material Subsidiaries to own, lease and operate its properties                and assets and to carry on its business as it is now being conducted                (the                “**Permits**”), except where the failure to have any of the                Permits have not had and could not reasonably be expected to have,                individually or in the aggregate, a Material Adverse Effect. Each                of the                Corporation and each Material Subsidiary is in compliance with such                Permits, except where the failure to be in compliance have not had                and                could not reasonably be expected to have, individually or in the                aggregate, a Material Adverse Effect. No suspension or cancellation                of any                of the Permits is pending or, to the knowledge of the Corporation,                threatened, except where the suspension orcancellation of any of                the                Permits have not had and could not reasonably be expected to have,                individually or in the aggregate, a Material Adverse                Effect. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Except                as disclosed in section 00 of the                Disclosure Letter, neither the                Corporation nor any of its Material Subsidiaries is in conflict with,                or                in default, breach or violation of: |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (A) | any                Law applicable to the Corporation or any of its Material Subsidiaries                or                by which any property or asset of the Corporation or any of its Material                Subsidiaries is bound; or |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | any                note, bond, mortgage, indenture, contract, agreement, lease, license,                Permit, franchise or other instrument or obligation to which the                Corporation or any of its Material Subsidiaries is a party or by                which the                Corporation or any of its Material Subsidiaries or any property or                asset                of the Corporation or any of its Material Subsidiaries is                bound; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Each                of the Corporation and its Material Subsidiaries is conducting its                business in compliance with all applicable Laws, except where the                failure                to do so could not reasonably be expected to have a Material Adverse                Effect. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | Absence                of Certain Changes or Events. Except as disclosed in section 00                of the                Disclosure Letter or the Filed CSA Documents, since December 31,                2005                there has not been any Material Adverse Change. During the period                since                December 31, 2005 through the date of this Agreement, except as set                forth                in section 00 of                the Disclosure Letter: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | the                Corporation and its Material Subsidiaries have conducted their businesses                only in the ordinary course consistent with past                practice; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | there                has not been any material damage, destruction or other casualty loss                with                respect to any material asset owned, leased or otherwise used by                the                Corporation or any of its Material Subsidiaries, whether or not covered                by                insurance; and |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | except                as disclosed in the Corporation’s Documents, neither the Corporation nor                any of its Material Subsidiaries has taken any action that, if taken                after                the date of this Agreement, would be prohibited by or constitute                a breach                or violation of any of the covenants set forth in section 0, 0, 0,0,0,0,0,0,                or 0. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (g) | Financial                Statements. |
|--------|-----|--------------------------------------|

|   | (i) | The                Financial Statements have been prepared in accordance with Canadian                generally accepted accounting principles applied on a consistent                basis and                present fairly in all material respects, on a consolidated basis,                the                financial position and the results of operations and the changes                in                Shareholders’ equity and cash flow of the Corporation and its subsidiaries                for the periods and as at the dates thereof (except as may be indicated                expressly in the notes thereto). In the case of unaudited statements,                this                representation is subject to normal, recurring year-end adjustments                that                would be made in the course of an audit and would not be                material. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Except                as disclosed in section 00 of the                Disclosure Letter, management of the                Corporation (A) has implemented disclosure controls and procedures                designed to ensure that material information relating to the Corporation,                including its subsidiaries, is made known to management of the Corporation                by others within those entities, which disclosure controls and procedures                are, given the size of the Corporation and the nature of its business,                reasonably expected by management to be effective in alerting on                a timely                basis the Corporation’s Chief Executive Officer and its Chief Financial                Officer to material information required to be included in the Filed                CSA                Documents (for the purposes of this section 000                without reference to Movie Distribution Income                Fund or Score Media Inc.), and (B) is not, to the knowledge of the                Corporation, aware of any fraud, whether or not material, that involves                management or other employees still employed by the Corporation who                have a                significant role in the Corporation’s internal control over financial                reporting that occurred within the three years preceding the date                of this                Agreement. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Since                September 30, 2006, to the knowledge of the Corporation, (A) neither                the                Corporation nor any of its subsidiaries nor any director, officer,                employee, auditor, accountant or representative of the Corporation                or any                of its subsidiaries has received or otherwise had or obtained knowledge                of                any material complaint, allegation, assertion or claim, whether written                or                oral, regarding the material accounting or auditing practices, procedures,                methodologies or methods of the Corporation or any of its subsidiaries                or                their respective internal accounting controls, including any complaint,                allegation, assertion, or claim that the Corporation or any of its                subsidiaries has engaged in questionable accounting or auditing practices,                and (B) no legal counsel representing the Corporation or any of its                subsidiaries, whether or not employed by the Corporation or any of                its                subsidiaries, has reported evidence of a material violation of applicable                securities Laws, breach of fiduciary duty or similar violation by                the                Corporation, any of its subsidiaries or any of their respective officers,                directors, employees or agents to the Board of Directors or any committee                thereof or to any director or officer of the                Corporation. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (h) | Absence                of Undisclosed Liabilities. Except as disclosed in the Financial                Statements or in section 00 of the                Disclosure Letter, and other than                indemnification provisions contained in agreements among underwriters                and                financial advisors, the Corporation and its subsidiaries have no                material                obligations or liabilities of any nature (matured or unmatured, fixed                or                contingent) other than those incurred in the ordinary course of business                consistent with past practice. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | Guarantees.                Except as disclosed in section 00 of the                Disclosure Letter or in the Financial                Statements and other than (i) indemnification provisions contained                in                certain agreements among underwriters and financial advisors, (ii)                cross-guarantees between two or more of the Corporation and its                subsidiaries, (iii) guarantees by the Corporation of obligations                of its                subsidiaries, and (iv) other guarantees and indemnities entered into                in                the ordinary course, neither the Corporation nor any of its subsidiaries                has given or agreed to give, nor are they a party to or bound by,                any                guarantee of indebtedness, indemnity or suretyship of other obligations                of                any Person, nor are they contingently responsible for such indemnity                or                suretyship or obligations to the Corporation which, if enforced,                could                reasonably be expected to be material to the                Corporation. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j) | Restrictions                on Business Activities. There is no arbitral award, judgment,                injunction, order or decree binding upon the Corporation or any of                its                subsidiaries that has or could reasonably be expected to have the                effect                of prohibiting, restricting, or impairing any business practice of                any of                them, any acquisition or disposition of property by any of them,                or the                conduct of the business by any of them as currently conducted, which                would                have, individually or in the aggregate, a Material Adverse                Effect. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (k) | Rights                of Other Persons. Except as disclosed in section 00                of the                Disclosure Letter, no Person has any right of first refusal or option                to                purchase or any other right of participation in any of the properties                or                assets in each case that are material to the Corporation and its                subsidiaries on a consolidated basis, owned by the Corporation or                any of                its subsidiaries, or any part                thereof. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (l) | Insurance.                All insurance maintained by the Corporation or any of its Material                Subsidiaries is in full force and effect and in good standing and                neither                the Corporation nor any of its Material Subsidiaries is in default                in any                material respect, whether as to payment of premium or otherwise,                under the                terms of any such insurance nor has the Corporation or any Material                Subsidiary failed to give any notice or present any material claim                under                any such insurance in a due and timely fashion or received notice                or                otherwise has knowledge of any intent of an insurer to either claim                any                default on the part of the Corporation or any of its Material Subsidiaries                or not to renew any policy of insurance on its expiry or to increase                any                deductible or cost. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (m) | Title                to Properties. |
|--------|-----|-------------------------------------|

|   | (i) | Neither                the Corporation nor any of its Material Subsidiaries owns any real                property.  Except as set forth in section 00 of the                Disclosure Letter,each of the Corporation and its Material Subsidiaries                has good and valid title to, or valid leasehold interests in, all                its                properties and assets except for such as are no longer used in the                conduct                of its businesses or as have been disposed of in the ordinary course                of                business and except for defects in title, easements, restrictive                covenants                and similar encumbrances or impediments that, in the aggregate, have                not                had and could not reasonably be expected to have a Material Adverse                Effect.  All such properties and assets, other than properties                and assets in which the Corporation or any of its Material Subsidiaries                has leasehold interests, are free and clear of all Liens other than                those                set forth in section 00 of the                Disclosure Letter and except for Liens                that, in the aggregate, have not had and could not reasonably be                expected                to have a Material Adverse Effect. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Except                as set forth in section 00 of the                Disclosure Letter, each of the                Corporation and each Material Subsidiary has complied in all material                respects with the terms of all material leases to which it is a party                and                under which it is in occupancy, and all such leases are in full force                and                effect.  The Corporation and each of its Material Subsidiaries                enjoys peaceful and undisturbed possession under all such material                leases. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (n) | Licences.                All licences issued by the CRTC that the Corporation or any of its                subsidiaries are required to obtain that are related to their respective                businesses or the ownership or operation of their respective properties                and assets have been obtained, are disclosed in section 00 of the                Disclosure Letter and are currently valid, in full force and effect                and in                good standing in all material respects and no proceedings specific                to the                Corporation or any of its subsidiaries are pending (other than renewal                proceedings as a result of expirations in accordance with the terms                thereof) or, to the knowledge of the Corporation, threatened, which                could                reasonably be expected to result in their revocation or                limitation. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (o) | Material                Contracts. Other than those Material Contracts set forth in section 00                of the                Disclosure Letter (“**Confidential Material Contracts**”),                the Corporation Information includes a complete and accurate list                of, and                copies of, all Material Contracts, all of which are in full force                and                effect and unamended, except where the failure to be in full force                and                effect and unamended could not reasonably be expected to have a Material                Adverse Effect. No default exists (or, but for the passage of time                or the                giving of notice, would exist) under any Material Contract on the                part of                the Corporation or any of its subsidiaries or, to the knowledge of                the                Corporation, on the part of any other party to such contracts other                than                defaults which could not reasonably be expected to have, individually                or                in the aggregate, a Material Adverse Effect.  Except as                disclosed in section 00 of the                Disclosure Letter, there is no                provision in any Material Contract which would result in the cancellation                or amendment of such Material Contract in any material respect or                create,                give rise to or change any rights or obligations of any Person under                such                Material Contract as a result of the consummation of the                Arrangement.  Except as set out in section 00 of the                Disclosure Letter, there is no provision in any Confidential Material                Contract which would result in the cancellation or amendment of such                Confidential Material Contract in any material respect orwhich would                give                rise to a change of any rights or obligations of any party to such                Confidential Material Contract (other than it being obligated to                the                transferee and having rights against the transferor if the transferee                does                not perform its obligations) in any material respect as a result                of an                assignment or deemed assignment of that contract pursuant to an                Inter-Affiliate Transfer.  Except as disclosed in section 00 of the                Disclosure Letter, no Confidential Material Contract during 2005                represented or related to or during 2006 is expected to represent                or                relate to more than 5% of the revenue or expenses of the Corporation                and                its subsidiaries, on a consolidated basis.  The Corporation has                informed Acquireco of the general nature of the Confidential Material                Contracts to the full extent it is permitted to do so.  Neither                the Corporation nor any of its subsidiaries is a party to any material                oral contract. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (p) | Labour                Matters. |
|--------|-----|--------------------------------|

|   | (i) | Except                as disclosed in 000                of the                Disclosure Letter, neither the Corporation nor any of its subsidiaries                are                parties to any collective bargaining agreements. To the knowledge                of the                Corporation, except as disclosed in section 00 of the                Disclosure Letter, (i) neither the Corporation nor any of its subsidiaries                is subject to any application for certification or threatened or                apparent                union-organizing campaigns for employees not covered under a collective                bargaining agreement, (ii) there are no current or, to the knowledge                of                the Corporation, threatened strikes or lockouts affecting the Corporation                or any of its subsidiaries or any complaint of unfair labour practice                (other than routine individual grievances), (iii) there are no successor                or related employer applications; and (iv) there are no employee                associations, voluntary recognized or certified unions authorized                to                represent any of the employees of the Corporation or any of its                subsidiaries. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Except                as disclosed in 000                of the                Disclosure Letter or where it could not reasonably be expected to                result                in a Material Adverse Effect, neither the Corporation nor any of                its                subsidiaries is subject to any claim for wrongful dismissal, constructive                dismissal, unjust dismissal or any other tort claim, actual or, to                the                knowledge of Corporation, threatened, or any litigation, investigation,                arbitration or grievance, actual or, to the knowledge of Corporation,                threatened, relating to employment or termination of employment of                employees or independent                contractors. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Except                as disclosed in section 000                of the                Disclosure Letter or where this could not reasonably be expected                to result                in a Material Adverse Effect, each of the Corporation and its subsidiaries                has operated in accordance with all applicable Laws with respect                to                employment and labour, including any pay equity and, where applicable,                employment equity Laws, and there are no current, pending or, to                the                knowledge of the Corporation, threatened proceedings before any board                or                tribunal with respect to any employment or labour                matters. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (iv) | The                Corporation Information includes all material details of all plans                or                arrangements provided for the benefit of employees generally or for                any                particular executive officer including all of the employee benefit,                health, welfare, disability, bonus, deferred compensation, stock                compensation, stock option or purchase or other stock-based compensation                plans or arrangements, retirement plans, post-retirement benefit                plans or                arrangements, pension plans or arrangements applicable to present                or                former employees or directors of the Corporation or any of its                subsidiaries which are currently maintained or participated in by                the                Corporation or any of its subsidiaries and under which the Corporation                or                any of its subsidiaries has any material obligations or liabilities,                but                excluding any statutory or state sponsored employee plans which the                Corporation or any of its subsidiaries are required to participate                in or                comply with (collectively, the “**Employee                Plans**”).  Section 000(A)                of the                Disclosure Letter includes a list of all of the Employee                Plans.  Except as disclosed in section 000(B)                of the Disclosure Letter, neither the                Corporation nor its subsidiaries sponsor or participate in a defined                benefit pension plan and have never sponsored or participated in                any                defined benefit pension plan. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | Except                as disclosed in section 000                of the                Disclosure Letter or where it could not reasonably be expected to                result                in a Material Adverse Effect, all of the Employee Plans have been                established and administered in all respects in accordance with their                terms and applicable Law, are registered where required by Law, and                are in                good standing in all respects, including being fully funded where                required, under, all applicable Laws or other legislative, administrative                or judicial promulgations applicable to the Employee Plans and pursuant                to                any applicable collective agreement and the terms of the Employee                Plans                and, other than routine claims for benefits, there are no actions,                claims,                or proceedings relating to the Employee                Plans. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | Except                as disclosed in section 000                of the                Disclosure Letter, no material amendments to any Employee Plan have                been                promised and no amendments to any Employee Plan will be made or promised                prior to the Effective Date which affect or pertain to the current                or                former employees or directors of the Corporation or any of its                subsidiaries. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | Except                as disclosed in section 000                of the                Disclosure Letter, there are no agreements or undertakings by the                Corporation or any of its subsidiaries to provide post-retirement                benefits                to any of their respective present or former employees or directors                other                than such as are not, either individually or in the aggregate, material                to                the Corporation and its subsidiaries on a consolidated                basis. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (viii) | The                Corporation has the authority to cause the companies set forth on                Schedule                0 to enter into the letter agreement                referred                to in section 0 of this Agreement without the                consent of any other party. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (q) | Employees.                Section 00 of                the Disclosure Letter includes: |
|--------|-----|----------------------------------------------------------------------------------------|

|   | (i) | an                accurate list, in all material respects, as of the date of this Agreement,                of the annual salary of all individuals earning annual salary of                $200,000                or more who are employed or retained by the Corporation or any of                its                subsidiaries (other than actors or production personnel) on a full                or part                time basis, notwithstanding that they may have been laid off or terminated                or on a short-term, long-term or parental leave, together with the                location of their employment or                service; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | an                accurate list, in all material respects, as of the date of this Agreement,                of the date each such individual or entity was hired or retained                by the                Corporation or a subsidiary, as applicable;                and |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | an                accurate list, in all material respects, of the severance or other                arrangements or plans pursuant to each contract entitling any employee,                officer or director of the Corporation or any subsidiary to any bonus,                retention payment, severance payment, change in control payment,                any                acceleration of any right or benefit, including any such right under                any                stock-based compensation plan, or similar entitlement as a result                of the                Corporation entering into this Agreement or completing any of the                transactions which are the subject                hereof. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (r) | Tax                Matters.  Except as set out in section 00                of the                Disclosure Letter: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | all                Tax Returns required to be filed with any taxing authority by or                on behalf                of the Corporation or any of its subsidiaries were filed when due                with all                appropriate taxing authorities in accordance with all applicable                Laws and                were correct in all material                respects; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the                unpaid Tax liability with respect to those returns identified in                Section                3.1(r) of the Disclosure Letter and any returns filed after their                due date                is not, individually or in the aggregate, in excess of                $5,000,000; |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | the                Corporation and each of its subsidiaries have timely paid (or withheld                and                remitted) to the appropriate taxing authority all Taxes due and payable                (or to be withheld or remitted) by any of them under any applicable                Law; |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | the                charges, accruals and reserves for Taxes with respect to the Corporation                and its subsidiaries reflected on the Financial Statements (whether                or not                due and whether or not shown on any Tax Return but excluding any                provision                for deferred income Taxes) are adequate under Canadian generally                accepted                accounting principles (“**Canadian                GAAP**”)** **to cover Taxes accruing through the                dates thereof, and since the dates thereof they have not incurred                any                material liability for Taxes other than in the ordinary course of                business                as disclosed and provided for in their Books and                Records; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (v) | the                tax basis of the assets of the Corporation and its subsidiaries by                category including the classification of such assets as being depreciable                or amortizable (collectively, the “**Tax Pools**”) as                reflected in the Tax Returns of the Corporation and its subsidiaries                is                true and correct in all material respects;                and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | there                is no proceeding, investigation, claim, re-assessment or audit now                pending                or threatened in writing in respect of any Tax or “tax asset” of the                Corporation or any of its subsidiaries, and there are no reassessments                of                Taxes of the Corporation or any of its subsidiaries that have been                issued                and which remain unpaid or unresolved.  For purposes of this                section 00, the                term “tax asset” shall include but is not limited to any net operating                loss, non-capital losses, net capital losses, Tax Pools, investment                tax                credit, foreign tax credit, charitable deduction or any other credit                or                Tax attribute which could reduce                Taxes. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (s) | Intellectual                Property. |
|--------|-----|---------------------------------------|

|   | (i) | In                respect of any applications or registrations relating to the Corporation                Intellectual Property in Canada and elsewhere, to the knowledge of                the                Corporation, all steps have been taken, including payment of fees                and                timely filing of documentation, that are necessary to obtain valid                and                enforceable registrations and to maintain such registrations and                applications in good standing to the extent such Corporation Intellectual                Property is still in use by the Corporation, except where the failure                to                take such steps could not reasonably be expected to have a Material                Adverse Effect. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Except                as stated in section 00 of the                Disclosure Letter, to the knowledge of                the Corporation, the Corporation or one of its subsidiaries is the                sole                legal and beneficial owner of, and owns all right, title and interest                in                all Corporation Intellectual Property free and clear of all Liens                or other                adverse claims or interests of any kind or nature, except for Liens                that,                in the aggregate, have not had and could not reasonably be expected                to                have a Material Adverse Effect. None of the Corporation Intellectual                Property is owned by or registered in the name of any Person other                than                the Corporation or a subsidiary, including, without limitation, any                current or former owner, shareholder, partner, director, executive,                officer, employee or contractor, nor does any such Person have any                interest therein or right thereto, including any license or the right                to                any royalty or other payments where same could reasonably be expected                to                have a Material Adverse Effect. No consent of any Person is necessary                to                make, use, reproduce, license, sell, modify, update, enhance or otherwise                exploit any Corporation Intellectual Property, except where the failure                to                obtain such consent could not reasonably be expected to have a Material                Adverse Effect. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | To                the knowledge of the Corporation, neither the Corporation nor any                of its                subsidiaries has received notice from any Person that was not a                regular, |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | full-time,                salaried employee of the Corporation or a subsidiary at the time                such                Person contributed to the creation of any Corporation Intellectual                Property or component thereof, asserting any claims with respect                to any                right, title or interest therein or any violation of any moral rights                in                connection therewith, except where such claim, if determined adverse                to                the Corporation, could not reasonably be expected to have a Material                Adverse Effect. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | The                Corporation or one of its subsidiaries has lawfully acquired the                right(s)                to use the Licensed Intellectual Property in the manner in which                it has                been used and is currently being used by the Corporation or any of                its                subsidiaries and in the manner currently contemplated to be used                in the                future, except where the failure to acquire such right could not                reasonably be expected to have a Material Adverse Effect. The Corporation                or one of its subsidiaries has entered into valid and enforceable                written                agreements pursuant to which the Corporation and any of its subsidiaries                has been granted all licenses and permissions to use, reproduce,                sub-license, sell, modify, update, enhance or otherwise exploit the                Licensed Intellectual Property to the extent required to operate                in all                material respects all aspects of the business of the Corporation                and any                of its subsidiaries as it is being operated at substantially the                same                level of performance as of the date                hereof. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | To                the knowledge of the Corporation, (i) the conduct of the businesses of the                Corporation and its subsidiaries including, the use of any of the                Corporation Intellectual Property does not infringe upon or breach                the                Intellectual Property rights of any other Person and (ii) the use                of any                of the Corporation Intellectual Property does not result in a default                or                give rise to a right of termination, cancellation or acceleration                of any                obligation or loss of any benefit under any Material Contract, and                neither                the Corporation nor any of its subsidiaries has received any written                notice asserting any of the above, except where such infringements,                breaches, defaults, rights or loss could not reasonably be expected                to                have a Material Adverse Effect. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | There                are no claims, oppositions, conflicts, proceedings, or investigations                by                any Governmental Entity against any Person, or, to the knowledge                of the                Corporation, any breaches, interferences, infringements, violations                or                appropriations by any Person, relating to any of the Corporation                Intellectual Property, except for such claims, oppositions, conflicts,                proceedings or investigations, if determined adverse to the Corporation,                or any breaches, interferences, infringements, violations or                appropriations that would have or could reasonably be expected to                have a                Material Adverse Effect. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | The                Corporation and its subsidiaries have the right to use all of the                Corporation Intellectual Property and Licensed Intellectual Property                which                is necessary to conduct their respective businesses as currently                conducted                in all material respects, except where the failure to have such right                has                not |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | had                and could not reasonably be expected to have a Material Adverse                Effect. |
|--------|-----------------------------------------------------------------------------------------------------------|

|   | (t) | Restrictive                Covenants*.* Except as disclosed in section 3.10 of the Disclosure Letter,                the Corporation and                its Material Subsidiaries are not party to or bound or affected by                any                commitment, agreement or document containing any covenant expressly                limiting its ability to compete in any material respect in any principal                line of business of the Corporation after the consummation of the                transactions contemplated by the Arrangement on substantially the                same                basis as presently carried on. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (u) | Non-Arm’s                Length Transactions. Except for contracts made solely between the                Corporation and any subsidiary or between any subsidiaries of the                Corporation, there are no Material Contracts between the Corporation                or                any of its subsidiaries and any Person with whom the Corporation                or any of                its subsidiaries is not dealing, at the date hereof, at Arm’s Length,                other than contracts entered into in the ordinary course of business                on                terms no less favourable to the Corporation and its subsidiaries                than are                available from an Arm’s Length                party. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | Books                and Records. All Books and Records fairly disclose in all material                respects the financial position of the Corporation and its subsidiaries                and all material financial transactions relating to the businesses                carried                on by the Corporation and its subsidiaries have been accurately recorded                in all material respects in such Books and Records. The corporate                minute                books of the Corporation and its subsidiaries contain minutes of                all                meetings and resolutions of the directors and security holders held,                except for those minutes which are not yet finalized. The Corporation                Information contains complete and correct copies of the minutes of                all                such meetings other than meetings of the Board of Directors relating                to                the transactions contemplated hereunder and minutes of meetings of                the                directors of Motion Picture Distribution Inc. held since June 1,                2006                which have not yet been finalized. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (w) | Government                Grants. Except as disclosed in section 3.10 of the Disclosure Letter or the                Financial                Statements, there are no contracts relating to grants or other forms                of                financial assistance, including loans with interest at below market                rates,                received by the Corporation or any of its subsidiaries from any                Governmental Entity. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x) | Canadian                Securities Legislation. The Corporation is a “reporting issuer” under                applicable Canadian securities legislation in each of the provinces                of                Canada in which such concept exists and is not in default of any                material                requirements of any securities Laws applicable in such jurisdictions                or                stock exchange on which its securities are listed for trading. No                delisting, suspension of trading in or cease trading order with respect                to                the Shares is pending or, to the knowledge of the Corporation, threatened.                The Corporation has filed with securities regulatory authorities                in such                jurisdictions and all applicable self-regulatory organizations, including                the Toronto Stock Exchange, true and complete copies of all documents                required to be filed with such authorities and organizations under                applicable securities Laws or otherwise (such forms, reports, schedules,                statements and other documents, including financial statements are                referred to as the                “**Corporation’s****Documents**”).  The                Corporation’s Documents, at the time filed, did not contain any                misrepresentation (as defined in the Securities Act), other than                as has                been subsequently corrected, and complied in all material respects                with                the applicable securities Laws or other requirements under which                they were                filed. As of the date of this Agreement, the Corporation’s Documents do                not contain any misrepresentation (as defined in the Securities Act).                The                Corporation has not filed any confidential material change report                which at                the date hereof remains                confidential. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (y) | Litigation.                Except as disclosed in section 00 of the                Disclosure Letter, there is no court,                administrative, regulatory or similar proceeding (whether civil,                quasi-criminal or criminal), arbitration or other dispute settlement                procedure, investigation, audit, assessment, inquiry, request for                information, warrant, charge, suit or claim by any Governmental Entity,                or                any similar matter or proceeding (collectively,                “**Proceedings**”) against or involving the Corporation or                any of its subsidiaries in respect of their respective businesses,                properties or assets (whether in progress or, to the best of the                Corporation’s knowledge after due inquiry, threatened) which, if                determined adversely to the Corporation or any of its subsidiaries,                would                have a Material Adverse Effect, and there is no order, ordinance,                writ,                judgment, decree, injunction, award or order of any Governmental                Entity                outstanding against the Corporation or any of its subsidiaries which                would                have a Material Adverse Effect.  There are no suits, claims,                actions or Proceedings pending or, to the knowledge of the Corporation,                threatened against the Corporation or any of its subsidiaries, seeking                to                prevent the Arrangement. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (z) | Brokers.                The Corporation and its subsidiaries have not incurred, nor will                they                incur, directly or indirectly, any liability for brokerage or finder’s                fees or agent’s commissions or any similar charges in connection with this                Agreement or any transaction contemplated hereby, other than fees                and                expenses payable to RBC Capital                Markets. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (aa) | Corrupt                Practices. Except as set forth in section 3.10 of the Disclosure Letter none                of the                Corporation or any of its subsidiaries, or, to the knowledge of the                Corporation, any of their respective representatives (in each case                acting                in their capacities as such) has any reasonable basis for believing                that,                in the past five (5) years, any of the foregoing Persons has (i)                used any                funds for unlawful contributions, gifts, entertainment or other unlawful                expenses relating to  political activity, (ii) directly or                indirectly paid or delivered any fee, commission or other sum of                money or                item of property, however characterized, to any finder, agent or                other                party acting on behalf of or under the auspices of a governmental                official                or Governmental Entity, in the United States or any other country,                that                was illegal under any applicable law, (iii) made any payment to any                customer or supplier, or to any officer, director, partner, employee                or                agent of any such customer or supplier, for the unlawful sharing                of fees                to any such customer or supplier or any such officer, director, partner,                employee or agent for the unlawful rebating of charges, (iv) engaged                in                any other unlawful reciprocal practice, or made any other unlawful                payment                or given any other unlawful consideration to any such customeror                supplier                or any such officer, director, partner, employee or agent, (v) taken                any                action or made any omission in violation of any applicable law governing                imports into or exports from the United States or any foreign country,                or                relating to economic sanctions or embargoes, corrupt practices, money                laundering, or compliance with unsanctioned foreign boycotts, including                without limitation: the Arms Export Control Act, the Trading with                the                Enemy Act, the International Emergency Economic Powers Act, the Export                Administration Act, the 1930 Tariff Act and other U.S. customs laws,                the                Foreign Corrupt Practices Act, the Export Administration Regulations,                the                International Traffic in Arms Regulations, the Office of Foreign                Assets                Control Regulations, the U.S. Customs Regulations, or any regulation,                ruling, rule, order, decision, writ, judgment, injunction, or decree                of                any governmental authority issued pursuant                thereto. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.2** | **Representations                and Warranties of Acquireco** |
|---------|----------------------------------------------------------------|

|   | (a) | Organization.                It has been duly incorporated or created under the Laws of its                jurisdiction of incorporation, is validly existing and has full corporate                power and capacity to own its properties and assets and conduct its                business as currently owned and                conducted. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Authority                and No Violation. |
|--------|-----|--------------------------------------------|

|   | (i) | It                has the requisite power and capacity to execute, deliver and perform                its                obligations hereunder and to complete the Arrangement. The execution,                delivery and performance of this Agreement by it and the completion                of the                Arrangement by it have been duly authorized and no other proceedings                on                its part are necessary to authorize the execution, delivery and                performance of this Agreement or the completion of the Arrangement                by                it. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | This                Agreement has been duly executed and delivered by it and constitutes                its                legal, valid and binding obligation, enforceable against it in accordance                with its terms, subject to bankruptcy, insolvency and other similar                laws                affecting creditors’ rights generally and to general principles of                equity. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | The                execution, delivery and performance by it of this Agreement and the                completion by it of the Arrangement will                not: |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (1) | its                Articles or Bylaws (or other constating                documents); |
|--------|-----|---------------------------------------------------------------------------------------|

----

|   | (2) | any                resolution of its board of directors (or any committee thereof) or                of its                shareholders; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | subject                to obtaining the Regulatory Approvals relating to it, any applicable                Laws;                or |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | any                material Contract to which it or its subsidiaries is a party or by                which                any of them is bound or their respective properties or assets are                bound;                or |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (iv) | No                consent, approval, order or authorization of, or declaration or filing                with, any Governmental Entity or other Person is required to be obtained                by it in connection with the execution, delivery or performance of                this                Agreement or the completion by it of the Arrangement other than the                Regulatory Approvals relating to                it. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Sufficient                Funds. |
|--------|-----|----------------------------------|

|   | (i) | Acquireco                has delivered to the Corporation copies                of: |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (A) | commitment                letters dated January 10, 2007 (the “**Funding Commitment                Letter**”), pursuant to which each of the Guarantors have                committed, subject to the terms and conditions set forth therein,                to                contribute (or cause to be contributed) capital to Acquireco (the                “**Initial Financing**”);                and |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | commitment                letters dated January 10, 2007 (collectively referred to herein as                the                “**Debt Commitment Letter**” and, together with the Funding                Commitment Letter, the “**Financing Agreements**”), which                relate to $1,925,000,000 of financing (the “**Debt                Financing**”) including term loan financing (the “**Term Loan                Financing**”), interim financing (the “**Bridge                Financing**”), receivables facility financing,                (“**Receivables Financing**”) and high yield debt financing                (“**High Yield                Financing**”). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Initial Financing**
**Debt Financing**
**Financing**

|   | (ii) | Subject                to its terms and conditions, the Financing, when funded in accordance                with                the Funding Commitment Letter and the DebtCommitment Letter, will                provide                financing sufficient to permit Acquireco to pay the aggregate Cash                Amount                payable pursuant to the Arrangement and to pay related fees and                expenses. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | As                of the date hereof, none of the Financing Agreements has been withdrawn                and Acquireco does not know of any facts or circumstances that may                reasonably be expected to result in any of the conditions set forth                in the                Financing Agreements to not be satisfied.  Except for the                conditions set forth, described or provided in the Financing Agreements,                there are no other conditions precedent to the                Financing. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | The                Financing Agreements have been duly executed and delivered and, as                at the                date of this Agreement, the Financing Agreements are in full force                and                effect and are legal and binding obligations of the Guarantors, in                the                case of the Funding Commitment Letter, and of Acquireco, in the case                of                the Debt Commitment Letter. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Investment                Canada Act. Acquireco is a “Canadian” as such term is defined in the                Investment Canada Act. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Residency.                Acquireco is not a “non-resident” of Canada within the meaning of the Tax                Act. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | Direction                to the CRTC. Acquireco is a “Canadian” within the meaning of the                Direction to the CRTC (Ineligibility of                Non-Canadians). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.3** | **Investigation** |
|---------|-------------------|

| **3.4** | **Survival** |
|---------|--------------|

**ARTICLE      4**

**REGULATORY      APPROVALS **

| **4.1** | **Applications** |
|---------|------------------|

----

**4.2           Competition      Approval **

|   | (a) | The                Corporation, Guarantors and Acquireco shall file any required pre-merger                notifications with the Competition Authorities as soon as                practicable.  Counsel for the Corporation and Acquireco shall                cooperate to the extent reasonably necessary to prepare the parties’                pre-merger notifications and the competition analysis and, if requested                by                any of the Competition Authorities, to promptly furnish additional                information. Counsel for the Corporation and Acquireco may exchange                confidential information of the parties on an “external counsel only”                basis in order to prepare filings and to secure clearance of this                transaction under the Competition                Laws. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Guarantors                and Acquireco shall keep the Corporation well informed of any meetings                or                correspondence with the Competition Authorities, shall provide the                Corporation and its counsel with an opportunity to attend such meetings                and to provide comments on draft correspondence to the Competition                Authorities, and shall provide the Corporation and its counsel with                copies                of correspondence to and from the Competition                Authorities.  Guarantors and Acquireco shall advise the                Corporation of any requests from the Competition Authorities for                information, documents or meetings, and Acquireco’s proposed response(s)                to such requests. The Corporation and the Corporation’s counsel shall                cooperate with Acquireco and Acquireco’s counsel in responding to the                Competition Authorities’ requests for information, documents or                meetings. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | If                any of the Competition Authorities advises Guarantors and Acquireco                that                it has concerns about the competitive impact of the transactions                contemplated by the Arrangement or this Agreement, and that Competition                Act Clearance or HSR Clearance will be given if certain steps are                taken to                resolve those concerns, Guarantors and Acquireco shall take any steps                reasonably necessary to secure Competition Act Clearance or HSR Clearance,                including negotiating, offering to take and, if such offer is accepted,                effecting by consent agreement or order, hold separate arrangement,                so as                to enable the transactions contemplated by the Arrangement and this                Agreement to be completed prior to the Outside Date, but for greater                certainty shall not be required to divest any                assets. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      5**

**COVENANTS      **

| **5.1** | **Covenants                of the Corporation** |
|---------|-------------------------------------------------|

|   | (a) | The                Corporation covenants and agrees that, between the date of this Agreement                and the earlier of the Effective Time and the date upon which this                Agreement is terminated in accordance with Article 7, except as set                forth                in section 0 of the Disclosure Letter or as                expressly contemplated by any other provision of this Agreement,                the                Corporation shall, and shall cause each of its subsidiaries to, carry                on                its business in the ordinary course consistent with past practice,                and                shall use its reasonable commercial efforts to preserve intact the                present                business organization of the Corporation and its subsidiaries and                to                preserve the current relationships of the Corporation and its subsidiaries                with customers, suppliers,distributors, licensors, employees and                other                Persons with which the Corporation or any of its subsidiaries has                significant business relations. Without limiting the generality of                the                foregoing, except as set forth in section 0                of the Disclosure Letter or as expressly contemplated by any other                provision of this Agreement, neither the Corporation nor any of its                subsidiaries shall, between the date of this Agreement and the Effective                Time, directly or indirectly, do or propose to do, any of the following                except as expressly required by Law or without the prior written                consent                of Acquireco: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | commence                to undertake a substantial or unusual expansion of its business facilities                or an expansion that is out of the ordinary course of business consistent                with past practice; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | declare                or pay any dividends (other than dividends in the ordinary course                and                consistent with past practice) on or make any other distributions                on or in                respect of the Class A Shares or the Class B                Shares; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | amend                or otherwise change its articles of incorporation or by-laws (or                equivalent organizational                documents); |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | allot,                reserve, set aside, issue, sell, pledge, dispose of, grant or encumber,                or                authorize or propose the allotment, reservation, setting aside, issuance,                sale, pledge, disposition, grant or encumbrance of, or purchase,                redeem,                or otherwise acquire, directly or indirectly, any shares in its capital                or                the capital of any subsidiary or any options, warrants, convertible                securities or rights to subscribe for, purchase or otherwise acquire                or                exchange into any shares, or any other ownership interest in the                Corporation or any subsidiary (including any phantom interest or                other                right linked to the price of the Shares), except (i) for the issuance                of                Class B Shares pursuant to Options, Purchase Rights, restricted stock                units and deferred stock units issued pursuant to the terms of the                Compensation Plans and which are outstanding on the date of this                Agreement                in accordance with their terms as in effect on the date of this Agreement                and (ii) the settlement for cash by the Corporation of any Performance                Share Appreciation Plan Units outstanding on the date of this Agreement                in                accordance with their terms; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | acquire                (including by merger, amalgamation, plan of arrangement, consolidation                or                acquisition of securities or assets or any other business combination)                any                corporation, partnership, other business organization or any division                thereof or any assets except (i) purchases of film and television                programming and related assets** **that are made                pursuant to contracts in effect as of the date hereof requiring such                purchases in the ordinary course of business consistent with past                practice                and pursuant to the 2006 programming budget (except as disclosed                in                section 000                of the Disclosure Letter) and (ii) except for                capital expenditures in amounts which are consistent with the 2006                Capital                budget and in amounts no greater than $2 million individually or                $5                million in the aggregate; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (vi) | sell,                lease, pledge, dispose of or encumber or authorize the sale, lease,                pledge, disposition or encumbrance of any assets of the Corporation                or any                of its subsidiaries, except sales in the ordinary course of business                consistent with past practice limited to those transactions involving                the                sale of television programming; |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | assume,                guarantee or endorse, or otherwise become responsible for the obligations                of any Person (other than in respect of an obligation incurred by                a                wholly-owned subsidiary that is not restricted hereunder from incurring                that obligation), make any loans or advances, incur any indebtedness                for                borrowed money or issue any debt securities, or rights, warrants,                calls or                options to acquire any debt securities of the Corporation or any                of its                subsidiaries, except for (i) borrowings under the Corporation’s credit                facilities in effect as of the date hereof in the ordinary course                of                business or (ii) advances made to employees for travel and moving                expenses                in the ordinary course of business consistent with past                practice; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (viii) | repay,                redeem, repurchase or retire, or otherwise make any payment in respect                of,                any indebtedness for borrowed money or any debt securities, or rights,                warrants, calls or options to acquire debt securities of the Corporation                or any of its subsidiaries, other than in the ordinary course of                business                consistent with past practice or as required by their terms as in                effect                on the date of this Agreement; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ix) | (A)                increase the compensation payable, or benefits provided, to its directors,                officers, or employees except, with respect to non-officer employees,                increases in annual base salary in the ordinary course of business                consistent with past practice or as expressly required by agreements                or                arrangements in existence as at the date hereof, (B) grant any severance                or termination pay or otherwise pay any amount to which employees                are not                entitled or accelerate any benefits under (other than as required                by                applicable Law or employment agreements, collective agreements, or                severance plans, agreements or arrangements in existence on the date                of                this Agreement), or enter into (except in the ordinary course consistent                with past practice with respect to new hires and promotions), amend                or                modify any employment, bonus, change of control or severance agreement                with, any director, officer or other employee of the Corporation                or any of                its subsidiaries except in the ordinary course of business for payments                of                annual bonuses that shall not exceed $12,000,000 in the aggregate                at                times, in amounts and otherwise on terms and conditions in the ordinary                course of business consistent with past practice in accordance with                the                terms of the 2006 incentive plan, or (C) establish, adopt, enter                into or                amend any collective agreement or benefit plan for the benefit of                any                director, officer or employee, except as required by                Law; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x) | reclassify,                combine, split or subdivide any of its                shares; |
|--------|-----|------------------------------------------------------------------------------------------|

----

|   | (xi) | take                any action or make any change, other than actions or changes required                by                Canadian GAAP or with respect to accounting policies or                procedures; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xii) | pay,                discharge or satisfy any material claim, liability or obligation                (whether                absolute, accrued, asserted or unasserted, contingent or otherwise),                other                than in the ordinary course of business consistent with past                practice; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xiii) | take                any action to cause any of its representations or warranties set                forth in                Article 3 to be untrue in any respect such that the condition set                forth in section 1)a)i)(1) would not be                satisfied; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xiv) | amend                or modify in any material respect or terminate any Material Contract                or                enter into any contract or agreement that would be a Material Contract                if                in effect on the date hereof, except for (A) any contract or agreement                for                the sale of goods or services entered into on arm’s length terms with a                customer of the Corporation or any subsidiary and (B) any Material                Contract that does not require payment of or receipt over the remaining                life of such contract of an amount in excess of the greater of $1,000,000                or an amount advised in writing by                Acquireco; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xv) | enter                into any union recognition agreement, collective agreement, works                council                agreement or similar agreement with any trade union or representative                body; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xvi) | (A)                cancel any material indebtedness, (B) waive, transfer, grant or release                any claims or potential claims of material value or (C) waive any                benefits                of, or agree to modify in any respect, or terminate, release or fail                to                enforce, or consent to any material matter with respect to which                consent                is required under, any confidentiality, standstill or similar agreement                to                which the Corporation or any subsidiary is a party or of which the                Corporation or any subsidiary is a                beneficiary; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xvii) | amend,                modify or terminate any insurance policy of the Corporation or any                subsidiary in effect on the date of this Agreement, except for scheduled                renewals of any other insurance policy of the Corporation or any                subsidiary in effect on the date hereof in the ordinary course of                business                consistent with past practice; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xviii) | license                or commit to license or otherwise acquire or transfer any Intellectual                Property or rights in or in respect thereto, other than in the ordinary                course of business; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xix) | announce                an intention, enter into any formal or informal agreement or otherwise                make a commitment to do any of the                foregoing. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | The                Corporation and its subsidiaries shall use all reasonable commercial                efforts to comply promptly with all requirements which applicable                Laws may                impose on the Corporation or its                subsidiaries; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Subject                to compliance with Competition Laws and Broadcasting Legislation,                the                Corporation shall promptly advise Acquireco by telephone and in writing                if                any senior officer of the Corporation becomes aware                of: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | any                event occurring subsequent to the date of this Agreement that would                render                any representation or warranty of the Corporation contained in this                Agreement, if made on or as at the date of such event or the Effective                Date, untrue or inaccurate; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | any                Material Adverse Change; or |
|--------|------|------------------------------------------------|

|   | (iii) | any                breach by the Corporation of any covenant contained in this                Agreement. |
|--------|-------|----------------------------------------------------------------------------------------------------------|

|   | (d) | Subject                to compliance with Competition Laws and Broadcasting Legislation,                the                Corporation will use all reasonable commercial efforts to consult                on an                ongoing basis with the Trustee in order that the Trustee will become                more                familiar with the Corporation and its subsidiaries as well as with                their                respective financial affairs, including in relation to any commitments,                arrangements or transactions proposed to be entered into that would                be out                of the ordinary course of business or outside the current operating                plan                that could reasonably be expected to give rise to a material liability                or                commitment of any kind and will use all reasonable commercial efforts                so                that such consultations are effected on a basis that will allow sufficient                time for the Trustee to give reasonable consideration to the                same; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Subject                to applicable Law (including Competition Laws and Broadcasting                Legislation), from the date of this Agreement until the Effective                Time,                the Corporation shall, and shall use all commercially reasonable                efforts                to cause its subsidiaries and respective officers, directors, employees                and agents of the Corporation and its subsidiaries to, afford Acquireco                and its directors, officers, employees, agents and advisors (including                financial advisors, counsel and accountants) collectively,                “**Guarantor Representatives**”) reasonable access, during                normal business hours and upon reasonable notice by Acquireco to                the                respective officers, employees, agents, properties, assets, offices                and                other facilities, Books and Records of the Corporation and each                subsidiary, and shall furnish Acquireco with such financial operating                and                other data and information as Acquireco or the Guarantor Representatives                may reasonably request; provided, however*,* that the Corporation                and its subsidiaries may withhold any Confidential Material Contract                or                any other contract or portions thereof which it is expressly restricted                from disclosing as a result of a legally enforceable confidentiality                obligation.  If any material is withheld by the Corporation or a                subsidiary in accordance with applicable Law, the Corporation or                such                subsidiary shall inform Acquireco as to the general nature of what                is                being withheld.All information obtained by Acquireco or any other                Person                pursuant to this section 0 shall be kept                confidential in accordance with, and shall be subject to, the                Confidentiality Agreements and the provisions regarding confidentiality                in                the Confidentiality Agreements should apply *mutatis mutandis* to                Acquireco. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | Between                the date of this Agreement and the earlier of the Effective Time                and the                date upon which this Agreement is terminated in accordance with Article                7,                the Corporation shall and shall cause its subsidiaries to perform                all                obligations required or desirable to be performed by the Corporation                or                any of its subsidiaries under this Agreement and shall do all such                other                acts and things as may be necessary or desirable in order to complete                (A)                as soon as reasonably practicable, the Arrangement, and (B) the                Contemplated Transactions, to the extent requested by Acquireco (for                the                avoidance of doubt, the effectiveness of the Contemplated Transactions                shall occur no more than three days prior to the Effective Time),                and,                without limiting the generality of the foregoing, the Corporation                shall                and where appropriate shall cause its subsidiaries                to: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | recommend                in the Circular and at the Meeting that Shareholders vote in favour                of the                Arrangement, and all public comment by the Corporation in relation                to the                Arrangement shall be made in accordance with section 0  and shall be consistent with and                supportive of such recommendation; and the Corporation shall not                act or                fail to act in any way that might reasonably be expected to discourage                Shareholders from voting in favour of the Special Resolution or that                might                encourage Shareholders to vote against the Special                Resolution; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | use                all reasonable commercial efforts to encourage each holder of the                Options,                Purchase Rights, restricted stock units and deferred stock units                to                exercise his or her Options, Purchase Rights, restricted stock units                and                deferred stock units of the Corporation to acquire Shares or such                cash                equivalent as may be permitted by the terms of the respective Compensation                Plan prior to the Effective Time and, subject to applicable Laws,                the                Corporation may, at its option, provide financing to the holders                of such                Options or Purchase Rights in respect of the exercise of such Options,                Purchase Rights, restricted stock units and deferred stock units                provided                that the Corporation obtains an irrevocable direction from any such                holder                of Options, Purchase Rights or restricted stock units and deferred                stock                units to the effect that payment for the Shares obtained on exercise                of                such Options, Purchase Rights, restricted stock units and deferred                stock                units pursuant to the Arrangement shall be paid to the Corporation                to the                extent sufficient to repay any such                financing; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | apply                for and use all reasonable commercial efforts to assist Acquireco                to                obtain all Regulatory Approvals and consents and waivers from any                Persons                required under the terms of any Material                Contracts; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | defend                all lawsuits or other legal, regulatory or other proceedings challenging                or affecting any matter contemplated by this Agreement or the completion                of the Arrangement; and |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (v) | use                all reasonable commercial efforts to have lifted or rescinded any                injunction or restraining order or other order relating to the Corporation                which may adversely affect the ability of the Corporation to complete                the                Arrangement. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | Notwithstanding                the covenants of the Corporation contained in section 0 of this Agreement, the Corporation                shall                purchase run-off directors’ and officers’ liability insurance providing                protection comparable to the protection provided by policies maintained                by                the Corporation in effect immediately prior to the Effective Date                in                favour of present and former directors and officers and providing                protection in respect of claims arising from facts or events which                occurred prior to the Effective Date for a period of up to six years                from                the Effective Time provided that the Corporation shall use commercially                reasonable efforts to provide such insurance coverage at the lowest                cost                possible and in no event shall the Corporation expend an amount in                excess                of U.S.$2,000,000 for such insurance                coverage. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | The                Corporation covenants and agrees that until the earlier of the Effective                Date and the termination of this Agreement in accordance with Article                7,                it and its subsidiaries will take those actions set out in paragraph                8 of                section 0 of the Disclosure Letter and will                (1) duly and timely file all Tax Returns required to be filed by                them,                which shall be correct and complete in all respects, (2) pay, withhold,                collect and remit in a timely fashion all amounts required to be                so paid,                withheld, collected or remitted, and (3) not, without the prior written                consent of Acquireco, (A) make, rescind or change any election relating                to                Taxes, annual Tax accounting period or method of Tax accounting in                any                material respect, (B) except as disclosed in section 00 of the                Disclosure Letter enter into (or offer to enter into) any agreement                (including any waiver) with any Governmental Entity relating to Taxes,                (C)                without the prior written consent of Acquireco, settle (or offer                to                settle) any material Tax claim, audit, proceeding or re-assessment,                (D)                amend any Tax Return or change from most recent practice any manner                of                reporting income or claiming deductions for Tax purposes, or (E)                take any                action or enter into any transaction, other than a Contemplated                Transaction or a transaction effected at the request of Acquireco                pursuant                to section 0 hereof, that would have the                effect of reducing, other than in the ordinary course of business,                or                eliminating the amount of the tax cost “bump” pursuant to paragraphs                88(1)(c) and (d) of the Tax Act otherwise available to Acquireco                and its                successors in respect of the Shares or the non-depreciable capital                properties owned by the Corporation and its subsidiaries including                for                greater certainty the subsidiaries of Motion Picture Distribution                LP as of                the date of this Agreement or acquired by such entities subsequent                to the                date of this Agreement as part of the Contemplated                Transactions. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | The                Corporation shall provide, and shall cause its affiliates to provide,                and                shall use reasonable best efforts to cause its and their officers,                employees, independent auditors, counsel and other representatives                to                provide, all reasonable and timely cooperation in connection with                the                arrangement of the Debt Financing as may be reasonably requested                by                Acquireco (provided, that the Corporation shall not berequired to                provide, or cause any affiliate to provide, cooperation under this                section                00 that                involves                any binding commitment by the Corporation or any of its affiliates                which                commitment is not conditional on the completion of the Arrangement                and                does not terminate without liability to the Corporation or its affiliates                upon the termination of this Agreement), including but not limited                to: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | arranging                for appropriate senior management of the Corporation, each of its                principal business divisions  and its affiliates (X) to meet at                reasonable times and on a reasonable number of occasions with rating                agencies, prospective lenders and investors in presentations, meetings,                road shows and due diligence sessions, (Y) to provide reasonable                and                customary management and legal representations to auditors and (Z)                to                provide reasonable and timely assistance with the preparation of                business                projections and similar materials with respect to the Corporation                and each                of its principal business                divisions; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | otherwise                reasonably cooperating with the marketing efforts of Acquireco and                its                financing sources for any of the Debt                Financing; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | furnishing                Acquireco and its financing sources with timely financial and other                pertinent information regarding the Corporation and each of its three                principal business divisions (including by preparing such financial                or                other pertinent information that may not exist) that it reasonably                believes to be accurate in all material respects and as may be reasonably                requested by Acquireco and is customary for (a) a high yield bond                offering                in the case of the Corporation’s broadcasting division and (b) a bank book                for a term loan financing, receivable financing and bridge financing,                in                each case, including the audited and unaudited historical financial                statements and financial data, *pro forma* financial statements and                related material (including appropriate management’s discussion and                analysis) for each of such three business divisions, which in the                case of                the Corporation’s broadcasting division shall be consistent with the                requirements of the U.S. Securities Act of 1933 and the rules and                regulations promulgated thereunder (the “**US Securities                Act**”) for a registered offering of debt securities as customarily                applied to an offering under Rule 144A under the US Securities Act                (“**Rule 144A**”) for a private offering of debt securities                (and including, with respect to any audited financial statements,                the                report of the auditors of each such division) (the “**Required                Financial Information**”); |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | satisfying                the conditions set forth in the Debt Commitment Letter (to the extent                satisfaction of such conditions requires actions by or cooperation                of the                Corporation or any of its affiliates), subject to such provisions                of the                Debt Commitment Letter being in the form provided to the Corporation                prior                to the signing of this Agreement; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | assisting                Acquireco and its financing sources (including by participating in                drafting sessions) in the timely preparation of (A) offering, information                or syndication documents for any of the Financing or any alternative                to                all orany portion thereof (“**Offering Documents**”),                including but not limited to (X) an offering memorandum, prepared                in                accordance with customary practices for any offering of debt securities                under Rule 144A, as customarily applied to an offering under Rule                144A for                a private offering of debt securities, with respect to any High Yield                Financing (or any alternative thereto) that Acquireco is seeking                to obtain                and (Y) an offering memorandum or prospectus prepared in accordance                with                customary practices for Term Loan Financing, Receivables Financing                and                Bridge Financing (or any alternative thereto) that Acquireco is seeking                to                obtain, including in each case under clauses (X) and (Y) above by                timely                providing the Required Financial Information and such other financial                and                pertinent information (such as tabular, compiled or other financial                data),                as shall exist (or if not existing, using reasonable best efforts                to                prepare such financial or other pertinent information) that the                Corporation reasonably believes to be accurate in all material respects                and as may be reasonably requested by Acquireco, and (B) materials                for                rating agency presentations; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | if                applicable, facilitating the pledging of collateral and obtaining                surveys                and title insurance as reasonably requested by                Acquireco; |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | if                applicable in connection with the Receivables Financing, cooperation                in                restructuring the ownership of Intellectual Property and internal                and                external licensing agreements, preparation of analyses of receivables,                and                cooperation with surety providers; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (viii) | using                reasonable best efforts to obtain comfort letters from the auditors                of                each of the business divisions and consent from such auditors for                Acquireco and any applicable business division to use any of their                audit                reports (including but not limited to by including such reports in                any                Offering Documents); |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ix) | using                reasonable best efforts to take such corporate actions as shall be                reasonably necessary to permit the consummation of the Debt Financing                and                to permit the proceeds thereof to be made available to Acquireco                on the                Closing Date; |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x) | using                reasonable best efforts to obtain legal opinions as may reasonably                be                requested by Acquireco; and |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xi) | using                reasonable best efforts to provide and execute necessary documents                and                certificates, including officer’s certificates, as may be reasonably                requested by Acquireco. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

0

----

0
0
0
0

0
0
0
0

|   | (j) | The                Corporation shall keep Acquireco informed, on a current basis, of                any                events, discussions, notices or changes with respect to any Tax (other                than ordinary course communications which could not reasonably be                expected                to be material to the Corporation), criminal or regulatory investigation                or action involving the Corporation or any of its subsidiaries, so                that                the Guarantors, their members and their respective affiliates will                have                the opportunity to take appropriate steps to avoid or mitigate any                cost or                regulatory consequences to them that might arise from such investigation                or action (including by reviewing written submissions in advance,                attending meetings with Taxing authorities and  coordinating and                providing assistance in meeting with                regulators). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (k) | The                Corporation shall cause each of the companies set forth on Schedule00 and                use                reasonable best efforts to cause such other companies identified                by GSCP                prior to the Closing Date to enter into a letter agreement with GSCP                or                its applicable affiliate, delegate or assignee, as of immediately                prior to                the Closing Date, that is reasonably satisfactory to GSCP and contains                substantially all of the rights described in U.S. Department of Labour                Advisory Opinion 2002-01A in order to comply with the requirements                of                Section 2510.3-101(d)(3)(ii) of                ERISA. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (l) | Notwithstanding                anything to the contrary herein, any obligation of the Corporation                in this                Agreement with respect to causing Motion Picture Distribution Inc.                to take                any action or refrain from taking any action shall only be a requirement                for the Corporation to use its reasonable best efforts to cause Motion                Picture Distribution Inc. to take such action or refrain from taking                such                action; provided that no director of Motion Picture Distribution                Inc.                shall be required to take any action in breach of such person’s fiduciary                duties.  Acquireco shall strictly enforce its rights under any                existing agreements with Motion Picture Distribution Inc. in furtherance                of Acquireco’s obligations hereunder, including pursuant to section 00. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | **5.2** | **Covenants                of Acquireco** |
|--------|---------|-------------------------------------------|

|   | (a) | Acquireco                covenants and agrees that between the date of this Agreement and                the                earlier of the Effective Time and the date this Agreement is terminated                in                accordance with Article 7, to perform all obligations required or                desirable to be performed by it under this Agreement and to do all                such                other acts and things as may be necessary or desirable in order to                complete, as soon as reasonably practicable, the Arrangement and,                without                limiting the generality of the foregoing,                to: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | use                all reasonable commercial efforts to comply promptly with all requirements                which applicable Laws may impose on Acquireco with respect to the                matters                contemplated by this Agreement and the                Arrangement; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | apply                for and use all reasonable commercial efforts to obtain all Regulatory                Approvals relating to Acquireco; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | defend                all lawsuits or other legal, regulatory or other proceedings to which                Acquireco is a party challenging or affecting any matter contemplated                by                this Agreement or the completion of the                Arrangement; |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | use                all reasonable commercial efforts to have lifted or rescinded any                injunction or restraining order or other order relating to Acquireco                which                may adversely affect the ability of the parties to complete the                Arrangement; and |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | not                permit any amendment or modification to be made to the Voting Agreements                in any manner that is material and adverse to the shareholders of                the                Corporation, without the prior written consent of the                Corporation; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | not                take any action to cause any of its representations or warranties                set                forth in Article 3 to be untrue in any material respect such that                the                condition set forth in section 0 would not be                satisfied; |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | (A) | Acquireco                shall use its reasonable best efforts to arrange the Debt | Financing                on the terms and conditions described in the Debt | Commitment                Letter, including using reasonable best efforts                to: |
|--------|-------|-----|------------------------------------------------------------------------------------|----------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|

|   | (1) | negotiate                definitive agreements with respect thereto on the terms and conditions                contained therein or on other terms not less beneficial to                Acquireco; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | satisfy                on a timely basis all conditions applicable to Acquireco in such                definitive agreements that are within its control;                and |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (3) | consummate                the Financing contemplated by the Debt Commitment Letter at the Effective                Time, subject to the Corporation’s compliance with section 0. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | In                the event any portion of the Debt Financing becomes unavailable on                the                terms and conditions contemplated in the Debt Commitment Letter,                Acquireco                shall use its reasonable best efforts to arrange to obtain alternative                financing, including from alternative sources, on terms that are                not less                beneficial to Acquireco (the “**Alternative Debt                Financing**”) as promptly as practicable following the occurrence                of such event, subject to the Corporation’s compliance with section 0. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (C) | In                the event that (X) any portion of the Debt Financing structured as                High                Yield Financing has not been consummated, (Y) all closing conditions                contained in Article 6 have been satisfied or waived (other than                those                conditions that are by their terms to be satisfied at the Effective                Date)                and (Z) the Bridge Financing (or bridge financing in any Alternative                Debt                Financing) is available on the terms and conditions described in                the Debt                Commitment Letter (or any replacement commitment letter obtained                by                Acquireco), then Acquireco shall borrow under and use the proceeds                of the                Bridge Financing (or such bridge financing in any Alternative Debt                Financing) to replace such affected portion of the High Yield Financing                no                later than the last day of the Marketing                Period. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Marketing Period**
0
0
0

----

|   | (E) | Acquireco                shall use its reasonable best efforts to enter into definitive credit                or                loan or other agreements and all documentation with respect to the                Financings on the terms and conditions set out in the Financing Agreements                or other terms and conditions not less favourable, in the aggregate,                to                Acquireco as soon as reasonably practicable, and Acquireco shall                deliver                to the Corporation correct and complete copies of such executed definitive                agreements and documentation promptly upon                execution. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (F) | Acquireco                agrees to notify the Corporation promptly, if at any time prior to                the                Effective Time any of the Financing Agreements expires or is terminated                for any reason. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (G) | Acquireco                shall keep the Corporation informed on a reasonably current basis                in                reasonable detail of the status of its efforts to arrange the Financing                and shall not permit any material amendment or modification to be                made to,                or any waiver of any material provision or remedy under the Debt                Commitment Letter, the Finance Agreements or any definitive agreement                or                documentation referred to in this section 0, without the prior written consent of                the                Corporation (such consent not to be unreasonably withheld or                delayed). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (H) | Acquireco                shall provide notice to the Corporation promptly upon confirming                the                drawdown dates for the Debt Financing and receiving the proceeds                of the                Debt Financing; and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (viii) | not                permit, without the prior written consent of the Corporation (such                consent                not to be unreasonably withheld), any Person other than the Guarantors                or                one or more of their affiliates to acquire, directly or indirectly,                a                voting or equity interest in Acquireco if it would materially increase                the                risk of obtaining approval of the Arrangement or the Contemplated                Transactions pursuant to the Competition                Act. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.3** | **Covenants                Regarding Non-Solicitation** |
|---------|---------------------------------------------------------|

|   | (a) | The                Corporation shall not, and shall cause each of its subsidiaries not                to,                directly or indirectly, through any officer, director, employee,                representative (including for greater certainty any financial or                other                advisors) or agent of the Corporation or any of its                subsidiaries: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | solicit,                assist, initiate, encourage or otherwise facilitate (including, without                limitation, by way of furnishing non-public information, permitting                any                visit to any facilities or properties of the Corporation or any subsidiary                or |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | entering                into any form of written or oral agreement, arrangement or understanding)                any inquiries, proposals or offers regarding an Acquisition                Proposal; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | engage                in or otherwise facilitate any discussions or negotiations regarding                any                Acquisition Proposal; |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | withdraw,                modify or qualify in a manner adverse to Acquireco, or propose publicly                to                withdraw, modify or qualify in a manner adverse to Acquireco, the                approval                or recommendation by the Board of Directors or any committee thereof                with                respect to this Agreement or the Arrangement (it being understood                that                publicly taking a neutral position or no position with respect to                an                Acquisition Proposal shall be considered an adverse modification,                except                that publicly taking a neutral position or no position with respect                to an                Acquisition Proposal for a period of time not in excess of 10 Business                Days after the first public announcement of such Acquisition Proposal                shall not be considered an adverse modification (such time period,                an                “**Acquisition Proposal Assessment Period**”) unless such                position continues beyond the expiration of the Acquisition Proposal                Assessment Period); |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | approve                or recommend, or propose publicly to approve or recommend, any Acquisition                Proposal; or |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | accept                or enter into or propose publicly to approve or recommend any letter                of                intent, agreement in principle, agreement, arrangement or undertaking                related to any Acquisition Proposal (other than a confidentiality                agreement as permitted pursuant to the terms of this                Agreement). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Subject                to sections 00,                00 and0                but notwithstanding section 00 and                any other                provision of this Agreement, nothing shall prevent the Board of Directors                at any time prior to the approval of the Special Resolution by the                Shareholders from considering, discussing or negotiating any *bona                fide* written Acquisition Proposal not solicited after the date of                this Agreement nor solicited contrary to the Exclusivity Agreement                that                (i) did not result from a breach of section 00 and                (ii) the                Board of Directors determines in good faith (after consultation with                its                financial advisors and outside counsel) is, or is reasonably likely                to                result in, a Superior Proposal if and only if the Board of Directors                determines in good faith, after consultation with outside legal counsel,                that the failure to take such action would be inconsistent with its                fiduciary duties. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | The                Corporation will immediately cease and cause to be terminated any                existing                solicitation, discussion or negotiation with any Person (other than                Acquireco) by the Corporation or any subsidiary or any of its or                their                officers, directors, employees, representatives or agents with respect                to                any potential Acquisition Proposal, whether or not initiated by the                Corporation or any subsidiaries or any of its or their officers,                directors, employees, representatives or agents, and, in connection                therewith, the Corporation will discontinue access to any data                rooms(virtual or otherwise).  The Corporation shall not release                any third party from any confidentiality agreement or standstill                agreement                (except to allow such party to propose an Acquisition Proposal to                the                Corporation), provided that the foregoing shall not prevent the Board                of                Directors from considering and accepting any new Acquisition Proposal                that                is determined to be a Superior Proposal that might be made by any                such                third party, provided that the remaining provisions of sections 0 and 0 of this                Agreement are complied with.  Within 15 Business Days from the                date hereof, the Corporation shall request the return or destruction                of                all information provided to any third parties who have entered into                a                confidentiality agreement with the Corporation relating to any potential                Acquisition Proposal and shall use all reasonable efforts to ensure                that                such requests are honoured in accordance with the terms of such                confidentiality agreements. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | The                Corporation shall promptly notify Acquireco by telephone, followed                by                notice in writing, of any proposal, inquiry, offer (or any amendment                thereto) or request relating to or constituting a *bona fide*                Acquisition Proposal received by or communicated to any officer of                director of the Corporation after the date hereof, or of any request                received after the date hereof for non-public information relating                to the                Corporation or any subsidiary in connection with an Acquisition Proposal                or for access to the properties, Books and Records of the Corporation                or                any subsidiary by any Person, and shall provide Acquireco with copies                of                any such proposal, inquiry, offer, request or Acquisition                Proposal.  Such notice shall include a description of the                material terms and conditions of any proposal and provide such details                of                the proposal, inquiry or contact as Acquireco may reasonably request                including the identity of the Person making such proposal, inquiry                or                contact.  The Corporation shall keep Acquireco reasonably                informed of the status and the material terms and conditions (including                any amendment thereto) of any such Acquisition Proposal, inquiry                or                request. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | If,                prior to the date of the Meeting, the Corporation receives a request                for                material non-public information from a Person who proposes a *bona                fide* Acquisition Proposal (notice of which has been provided to                Acquireco in accordance with 00) and                is permitted, as contemplated by section                00, to                consider,                discuss or negotiate, then, and only in such case, the Board of Directors                may, subject to the execution by such Person of a confidentiality                agreement which is substantially in the form of the Confidentiality                Agreements, provide such Person with access to information regarding                the                Corporation and its subsidiaries provided, however, that Acquireco                is                provided with a list of or copies of the information provided to                such                Person and is immediately provided with access to the same information                to                which such Person was provided. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | Nothing                contained in this section 0 shall prohibit                the Board of Directors at any time prior to approval of the Special                Resolution by the Shareholders                from: |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | making                any disclosure of an Acquisition Proposal to the Shareholders prior                to the                Effective Time if the Board of Directors determines in good faith                (after                consultation with outside counsel) that such disclosure is necessary                for                the Board of Directors to fulfill its fiduciary duties or is otherwise                required under applicable Law; and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ii) | responding                to a *bona fide* request for information that could reasonably be                expected to lead to an Acquisition Proposal solely by advising that                no                information can be provided unless a *bona**fide* written                Acquisition Proposal is made and then only in compliance with section00. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.4** | **Notice                by the Corporation of Superior Proposal Determination** |
|---------|---------------------------------------------------------------------------------|

|   | (a) | The                Corporation shall not accept, approve, recommend or enter into any                agreement relating to an Acquisition Proposal (other than a                confidentiality agreement contemplated by section 0) on the basis that it would constitute                a                Superior Proposal unless (A) it has provided Acquireco with a copy                of the                Acquisition Proposal and five Business Days shall have elapsed from                the                later of (i) the date Acquireco received written notice of the                Corporation’s proposed determination to accept, approve, recommend or                enter into any agreement relating to such Acquisition Proposal, and                (ii)                the date Acquireco received a copy of the Acquisition Proposal, and                (B) it                has paid the Termination Payment pursuant to section 0. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | During                the five Business Day notice period referred to in section 00, the                Corporation                acknowledges that Acquireco shall have the opportunity, but not the                obligation, to offer to amend the terms of this Agreement. The Board                of                Directors will review any offer by Acquireco to amend the terms of                this                Agreement in order to determine in good faith in the exercise of                its                fiduciary duties (after consultation with its advisors and outside                counsel) whether Acquireco’s offer to amend the terms of this Agreement                upon acceptance by the Corporation would result in the Acquisition                Proposal ceasing to be a Superior Proposal. If the Board of Directors                so                determines, it will enter into an amended agreement with Acquireco                reflecting Acquireco’s amended proposal. If the Board of Directors, acting                reasonably and in good faith, continues to believe that the Acquisition                Proposal remains a Superior Proposal and therefore rejects Acquireco’s                amended proposal, the Corporation must terminate this Agreement pursuant                to section 0 prior to or simultaneously with                entering into a definitive agreement with the Person making the Superior                Proposal. For greater certainty, the Corporation shall be entitled                to                adjourn or postpone the Meeting for a period of seven Business Days                from                the date of receipt of an Acquisition Proposal referred to in section00 if such                Acquisition Proposal is received by the Corporation less than seven                Business Days prior to the date of the Meeting provided, however,                that the                Meeting shall not be adjourned or postponed to a date later than                the third                Business Day prior to the Outside                Date. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | The                Corporation acknowledges and agrees that each successive material                modification of any Acquisition Proposal shall constitute a new                Acquisition Proposal for purposes of section 00 to initiate                an                additional five Business Day notice                period. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | The                Board of Directors shall promptly reaffirm its recommendation of                the                Arrangement by press release after (X) any Acquisition Proposal (which                is                determined not to be a Superior Proposal) is publicly announced or                made;                or (Y) the Board of Directors determines that a proposed amendment                to the                terms of thisAgreement would result in the Acquisition Proposal not                being                a Superior Proposal.  Acquireco and its counsel shall be given a                reasonable opportunity to review and comment on the form and content                of                any such press release, recognizing that whether or not such comments                are                appropriate will be determined by the Corporation, acting                reasonably.  Such press release shall state that the Board of                Directors has determined that the Acquisition Proposal is not a Superior                Proposal. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.5** | **Closing                Matters** |
|---------|------------------------------------|

| **5.6** | **Cooperation                regarding Reorganization** |
|---------|---------------------------------------------------------|

**ARTICLE      6**

**CONDITIONS      **

| **6.1** | **Mutual                Conditions Precedent** |
|---------|------------------------------------------------|

|   | (a) | the                Special Resolution shall have been approved at the Meeting in accordance                with the terms of the Interim                Order; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | the                Interim Order and the Final Order shall each have been obtained in                form                and on terms satisfactory to each of Acquireco and the Corporation,                acting                reasonably, and shall not have been set aside or modified in a manner                unacceptable to Acquireco and the Corporation, acting reasonably,                on                appeal or otherwise, and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | any                approvals required to be obtained under same in addition to the                Shareholder approval referred to in section 00 shall                have been                obtained; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | the                Competition Act Clearance and HSR Clearance shall have been                obtained; |
|--------|-----|---------------------------------------------------------------------------------------------------------|

|   | (d) | there                shall not be in force any injunction, order or decree issued by a                Governmental Entity of competent jurisdiction restraining or enjoining                the                completion of the Arrangement; and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | this                Agreement shall not have been terminated pursuant to Article                7. |
|--------|-----|----------------------------------------------------------------------------------------------------|

| **6.2** | **Additional                Conditions Precedent to the Obligations of Acquireco** |
|---------|------------------------------------------------------------------------------------|

|   | (a) | (1) | each                of the representations and warranties of the Corporation contained                in                sections 0, 0,                0 and 0 shall                be                true and correct in all respects as of the Effective Date as though                made                on and as of such date (except to the extent such representations                and                warranties are by their express terms made as of the date of this                Agreement or another specific date (in which case, such representations                and warranties shall be true and correct as of such                date)); |
|--------|-----|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | each                of the representations and warranties of the Corporation, (other                than                those set forth in clause 0(1)(1)                above) shall                be true and correct without regard to any materiality or Material                Adverse                Effect qualifications contained in them as of the Effective Date                as though                made on such date (except to the extent such representations and                warranties are by their express terms made as of the date of this                Agreement or another specific date (in which case, such representations                and warranties shall be true and correct as of such date)), other                than any                failure of the representations and warranties of the Corporation                to be                true and correct which could not reasonably be expected to constitute,                individually or in the aggregate, a Material Adverse Effect;                and |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Acquireco                shall have received a certificate of the Corporation addressed to                Acquireco and dated the Effective Date, signed on behalf of the                Corporation by two senior executive officers of the Corporation without                personal liability, confirming the matters in (i) and (ii) above                as of the                Effective Date; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | the                covenants of the Corporation contained in this Agreement to be performed                on or before the Effective Date shall have been duly performed by                the                Corporation in all material respects and Acquireco shall have received                a                certificate of the Corporation addressed to Acquireco and dated the                Effective Date, signed onbehalf of the Corporation by two senior                executive                officers of the Corporation without personal liability, confirming                the                same; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | all                of the Options, Purchase Rights, restricted stock units and deferred                stock                units of the Corporation, shall have vested in accordance with the                provisions of the relevant Compensation Plan or any necessary amendment                thereto, and been exercised at or immediately prior to the Effective                Time                or the Corporation shall have cancelled                same; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | except                as disclosed in section 0 of the Disclosure                Letter, between the date hereof and the Effective Date, there shall                not                have occurred, in the judgment of Acquireco, acting reasonably, a                Material                Adverse Change; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | the                Board of Directors shall have made and shall not have withheld, withdrawn,                modified or qualified in a manner adverse to Acquireco, prior to                the                Meeting, the approval or recommendation by the Board of Directors                or any                committee thereof of the                Arrangement; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | the                Minister of Finance (Canada) shall not have announced any proposal                to                change or amend the Tax Act and there shall not have occurred any                actual                change or amendment to any published administrative position of the                Canada Revenue Agency with respect to the interpretation of the Tax                Act,                which individually or in the aggregate has or could reasonably be                expected                to have any material adverse effect on Acquireco’s ability to increase the                tax cost of the Shares or the non-depreciable capital property of                the                Corporation and its subsidiaries by a bump pursuant to paragraphs                subsection 88(1)(c) and (d) of the Tax Act) and which was not publicly                announced or proposed on or prior to the date of this                Agreement; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | the                Voting Agreements shall not have been terminated and there shall                not have                been a material breach thereof by any of the parties thereto other                than                Acquireco; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | holders                of Shares shall not have exercised the Dissent Rights or similar                rights,                and shall not have instituted proceedings to exercise the Dissent                Rights                or similar rights, in connection with the Arrangement (other than                holders                of Shares representing, in the aggregate, not more than 10% of the                outstanding Shares); |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | any                consent or waiver of any Person required under the terms of the                Confidential Material Contracts (other than those listed as items                2, 3 and                4 of section 0 of the Disclosure Letter to                the extent the consent or waiver requirements of such Confidential                Material Contracts were made available to Acquireco prior to the                date                hereof) with respect to (A) the Arrangement or (B) the completion                of any                of the Contemplated Transactions, in each case, shall have been duly                obtained or given, as the case may be, at or before the Effective                Time on                terms satisfactory to Acquireco acting                reasonably; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j) | there                shall not be pending or threatened in writing any suit, action or                proceeding by any Governmental Entity (other than the CRTC) or any                other                Person: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (i) | that                would reasonably be expected to prohibit or restrict the acquisition                by                Acquireco of any Shares, that would reasonably be expected to restrain                or                prohibit the consummation of the Arrangement or the Contemplated                Transactions or seeking to obtain from the Corporation or Acquireco                any                material damages directly or indirectly in connection with the Arrangement                or the Contemplated Transactions, |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | that                would reasonably be expected to prohibit or materially limit the                ownership                or operation by Acquireco of the Corporation or any material portion                of                the business or assets of the Corporation or any of its                subsidiaries, |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | that                would reasonably be expected to impose limitations on the ability                of                Acquireco to acquire or hold, or exercise full rights of ownership                of, any                Shares, including the right to vote the Shares to be acquired by                it on all                matters properly presented to the shareholders of the                Corporation, |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | that                would reasonably be expected to prohibit Acquireco from effectively                controlling in any material respect the business or operations of                the                Corporation or any of its subsidiaries,                or |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | which                arises after the date of this Agreement and is reasonably likely                to have a                Material Adverse Effect on the Corporation or                Acquireco; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (k) | there                shall not be in force any injunction, order or decree issued by a                Governmental Entity of competent jurisdiction restraining or enjoining                the                completion of the Contemplated Transactions;                and |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (l) | the                Other Competition Act Approvals and CRTC Approval shall each have                been                obtained on or prior to the Outside Date on terms acceptable to                Acquireco. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **6.3** | **Additional                Conditions Precedent to the Obligations of the Corporation** |
|---------|------------------------------------------------------------------------------------------|

|   | (a) | each                of the representations and warranties of Acquireco contained in sections                0 and 0 shall                be                true and correct as of the Effective Date as though made on and as                of the                such date (except to the extent such representations and warranties                are by                their express terms made as of the date of this Agreement or another                specific date (in which case, such representations and warranties                shall be                true and correct as of such date)). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | each                of the representations and warranties of Acquireco in this Agreement                (other than those set forth in clause 00 above),                shall be true and correct as of the                date of this Agreement without regard to any materiality qualifications                contained inthem as of the Effective Date as though made on such                date                (except to the extent such representations and warranties are by                their                express terms made as of the date of this Agreement or another specific                date (in which case, such representations and warranties shall be                true and                correct as of such date)), other than any failure of the representations                and warranties of Acquireco to not be true and correct as which could                not                reasonably be expected, individually or in the aggregate, to materially                impair Acquireco’s ability to complete, or cause to be completed, the                Arrangement; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | the                Corporation shall have received a certificate of Acquireco addressed                to                the Corporation and dated the Effective Date, signed on behalf of                Acquireco by two senior executive officers thereof without personal                liability, confirming the matters in (i) and (ii) above as of the                Effective Date; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | all                covenants of Acquireco contained in this Agreement to be performed                on or                before the Effective Date shall have been duly performed by Acquireco                in                all material respects, except to the extent such failure to so comply                would not materially impair Acquireco’s ability to complete the                Arrangement; and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Acquireco                shall, subject to the Corporation obtaining the Final Order and the                satisfaction or waiver of the other conditions precedent contained                in this                Agreement in its favour, on the Effective Date, have deposited the                aggregate Cash Amount payable pursuant to the Arrangement (other                than to                Shareholders exercising Dissent Rights) with the                Depositary. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **6.4** | **Notice                and Cure Provisions** |
|---------|-----------------------------------------------|

|   | (a) | cause                any of its representations or warranties contained herein to be untrue                or                inaccurate in any material respect on the date hereof or on the Effective                Date; or |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | result                in its failure to comply with or satisfy in any material respect                any                covenant, condition or agreement to be complied with or satisfied                hereunder prior to the Effective                Date. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

(1)
0
0
0
0
0
0
0

----

| **6.5** | **Satisfaction                of Conditions** |
|---------|-----------------------------------------------|

0
0
0

**ARTICLE      7**

**TERMINATION,      AMENDMENT AND WAIVER**

| **7.1** | **Termination** |
|---------|-----------------|

|   | (a) | by                mutual written consent of Acquireco and the Corporation duly authorized                by                the board of directors of Acquireco and the                Corporation; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | by                either Acquireco or the Corporation if the Effective Time shall not                have                occurred on or before the Outside Date; provided, however, that the                right                to terminate this Agreement under this section 00 shall                not be                available to any party whose failure to fulfill any obligation under                this                Agreement has been the cause of, or resulted in, the failure of the                Effective Time to occur on or before such                date; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | (A)                by either Acquireco or the Corporation if any Governmental Entity                shall                have enacted, issued, promulgated, enforced or entered any Law which                has                become final and non-appealable and has the effect of making the                Arrangement illegal or otherwise preventing or prohibiting consummation                of                the Arrangement; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | by                either Acquireco or the Corporation if the Special Resolution shall                have                failed to receive the requisite vote for approval at the Meeting                including                any adjournment or postponement thereof in accordance with the Interim                Order; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | by                Acquireco if, prior to the Effective                Time: |
|--------|-----|-----------------------------------------------------------------------------|

|   | (i) | the                Board of Directors shall have withdrawn, withheld, qualified or modified                in a manner adverse to Acquireco its recommendation of this Agreement                (it                being understood that the taking of a neutral position or no position                with                respect to an Acquisition Proposal beyond the Acquisition Proposal                Assessment Period shall be considered an adverse                modification), |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ii) | the                Board of Directors shall have approved or recommended, or proposed                publicly to approve or recommend, any Acquisition Proposal,                or |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | the                Board of Directors shall have, after the end of an Acquisition Proposal                Assessment Period, failed to reaffirm its approval or recommendation                of                this Agreement and the Arrangement as promptly as practicable (but                in any                event within 10 Business Days) after receipt of any written request                to do                so from Acquireco; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | by                Acquireco, if there has been a breach of or failure to perform any                representation, warranty, covenant or agreement on the part of the                Corporation set forth in this Agreement, which breach or failure                to                perform by the Corporation would cause the conditions set forth in                section                (1) or 0 not                to                be satisfied; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | by                the Corporation, if there has been a breach of or failure to perform                any                representation, warranty, covenant or agreement on the part of Acquireco                set forth in this Agreement, which breach or failure to perform would                cause the conditions set forth in section 0                or 0 not to be                satisfied. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | by                the Corporation in accordance with section 0; |
|--------|-----|-----------------------------------------------------------------|

|   | (i) | by                the Corporation, if (a) all of the conditions set forth in sections0 and 0 have                been                satisfied and remain satisfied or waived by Acquireco (other than                those                conditions that by their terms are to be satisfied at the Effective                Time)                and (b) Acquireco shall not have received the proceeds of the Debt                Financing or any Alternative Debt Financing by the Closing Date;                or |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j) | by                Acquireco if the conditions set forth in section 0 or 0 have                not                been satisfied. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------|

| **7.2** | **Effect                of Termination** |
|---------|------------------------------------------|

|   | (a) | In                the event of the termination of this Agreement pursuant to section0, written notice thereof shall forthwith                be                given by the terminating party to the other party specifying the                provision                pursuant to which such termination is made, this Agreement shall                be of no                further force or effect, and there shall be no liability under this                Agreement on the part of any party hereto after such termination                (except                that sections 0, 0, 0                and Article 8                and all related definitions set forth in Article 1 and the reimbursement                obligations in sections, 0 and 0 shall                survive any such                termination). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | The                Corporation shall pay the Termination Payment (as liquidated damages                for                the termination of Acquireco’s rights under this Agreement) to Acquireco                if, |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | either                (A)  Acquireco or the Corporation terminates this Agreement                pursuant to section 0, or (B) Acquireco or                the Corporation terminates this Agreement pursuant to section 0, or (C) Acquireco terminates this                Agreement                pursuant to section 0, and in any such case,                (X) after the date of this Agreement and prior to such termination,                an                Acquisition |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Proposal                was made or publicly disclosed, and (Y) within twelve months after                such                termination, the Corporation shall have entered into a definitive                agreement to consummate, or there shall have been consummated, a                Third                Party Acquisition; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Acquireco                terminates this Agreement pursuant to section 0; |
|--------|------|---------------------------------------------------------------------------|

|   | (iii) | the                Corporation terminates this Agreement pursuant to section 0; or |
|--------|-------|------------------------------------------------------------------------------------|

|   | (iv) | Acquireco                terminates this Agreement pursuant to section 0 due to the wilful breach or fraud                of the                Corporation. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

0
0
0
0
0
0
0
0

|   | (c) | The                Corporation shall reimburse Acquireco for the Guarantor Expenses                actually                incurred in connection with this Agreement if this Agreement is terminated                pursuant to (A) section 0 and after the date                of this Agreement and prior to such termination, an Acquisition Proposal                was made or publicly disclosed prior to such termination, (B) section0 and the conditions set forth in either                section                0 or section 0                have not been satisfied prior to such date, (C) section 0 or (D) section 0,                in each case, upon demand upon such                termination. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Acquireco                shall reimburse the Corporation for the Corporation Expenses if this                Agreement is terminated (A) by the Corporation pursuant to section0 or (B) by Acquireco pursuant to section0 for                failure of the condition set forth in                section 0 or section 0(B),                upon demand upon such                termination. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Each                party acknowledges and agrees that if the amounts required to be                paid to                Acquireco or the Corporation, as the case may be, pursuant to section0 are paid by the Corporation or Acquireco,                respectively, the amounts so paid are in lieu of any damages or any                other                payment or remedy which Acquireco or the Corporation, as the case                may be,                may be entitled to and shall constitute payment of liquidated damages                which are a genuine estimate of the damages which Acquireco or the                Corporation, as the case may be, will suffer or incur as a result                of the                event giving rise to such damages and resultant termination of this                Agreement and are not penalties.  Each party irrevocably waives                any right it may have to raise as a defence that any such liquidated                damages are excessive or punitive.  For greater certainty, the                parties agree that the payment of the amounts pursuant to section0 or 0 is the                sole                monetary remedy available to it and itshall not have any alternative                right                or remedy against the other.  In no event shall the Corporation                be obligated to make more than one single payment of the Termination                Payment or more than one single payment of the Guarantor                Expenses.  The maximum amount payable by the Corporation                pursuant to this Article 7 is                $65,000,000. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **7.3** | **Expenses** |
|---------|--------------|

0

| **7.4** | **Acquireco                Termination Payment** |
|---------|--------------------------------------------------|

0
0
0
0
0
0
**Acquireco Termination      Payment**
0
0
**Specified Person**
0
0

| **7.5** | **Amendment** |
|---------|---------------|

| **7.6** | **Waiver** |
|---------|------------|

----

|   | (b) | waive                any inaccuracy in the representations and warranties of any other                party                contained herein or in any document delivered pursuant hereto;                or |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | waive                compliance with any agreement of any other party or any condition                to its                own obligations contained herein. Any such extension or waiver shall                be                valid if set forth in an instrument in writing signed by the party                or                parties to be bound thereby. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      8**

**GENERAL      **

| **8.1** | **Notices** |
|---------|-------------|

|   | (a) | if                to Acquireco, at: |
|--------|-----|-------------------------------------|

----

|   | (b) | if                to the Corporation, at: |
|--------|-----|-------------------------------------------|

0
0

----

**or **
** **

| **8.3** | **Binding                Effect** |
|---------|-----------------------------------|

| **8.4** | **No                Other Warranties** |
|---------|----------------------------------------|

| **8.5** | **Separate                Warranties** |
|---------|----------------------------------------|

| **8.6** | **Entire                Agreement** |
|---------|-------------------------------------|

| **8.7** | **Remedies                and Waivers** |
|---------|-----------------------------------------|

|   | (a) | No                delay or omission by any party to this Agreement in exercising any                right,                power or remedy provided by Law or under this Agreement or any other                documents referred to herein shall affect that right, power or remedy                or                operate asa waiver thereof.  The single or partial exercise of                any right, power or remedy provided by Law or under this Agreement                shall                not preclude any further exercise of such right, power or remedy                or the                exercise of any other right, power or remedy.  The rights,                powers and remedies provided in this Agreement are cumulative and                not                exclusive of any rights, powers and remedies (express or implied)                provided                by common law, statute, custom or                otherwise. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Subject                to sections 0 and 0, the                parties agree that irreparable damage                would occur, and that the parties would not have any adequate remedy                at                law, in the event that any of the provisions of this Agreement were                not                performed in accordance with their specific terms or were otherwise                breached.  It is accordingly agreed that the parties shall be                entitled to an injunction or injunctions to prevent breaches of this                Agreement and to enforce specifically the terms and provisions of                this                Agreement, this being in addition to any other remedy to which they                are                entitled at law or in equity.  For purposes of clarity, the                parties hereto agree that the Corporation’s sole and exclusive remedy in                the event of a Debt Receipt Failure shall be the remedy set forth                in                section 0, and that the Corporation shall not                be entitled to enforce specifically the terms of this agreement in                that                circumstance (except with respect to enforcing the payment of the                Acquireco Termination Payment). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8.8** | **No                Personal Liability** |
|---------|------------------------------------------|

|   | (a) | No                director or officer of Acquireco shall have any personal liability                whatsoever to the Corporation under this Agreement or any other document                delivered in connection with the Arrangement, the Contemplated                Transactions, the Debt Financing or any other transaction contemplated                by                this Agreement on behalf of                Acquireco. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | No                director or officer of the Corporation shall have any personal liability                whatsoever to Acquireco under this Agreement or any other document                delivered in connection with the Arrangement, the Contemplated                Transactions, the Debt Financing or any other transaction contemplated                by                this Agreement on behalf of the                Corporation. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8.9** | **Control                of Other Party’s Business** |
|---------|------------------------------------------------------------|

| **8.10** | **Indemnification** |
|----------|---------------------|

0

----

**8.11        Further      Assurances**

| **8.12** | **Public                Statements** |
|----------|--------------------------------------|

0
0

| **8.13** | **Governing                Law** |
|----------|----------------------------------|

| **8.14** | **Invalidity                of Provisions** |
|----------|---------------------------------------------|

| **8.15** | **Counterparts** |
|----------|------------------|

----

**IN      WITNESS WHEREOF **

|   |                                                                                                                                                                   | **6681859                CANADA INC.** |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|
| By:    | * /s/                Richard Leipsic*                                                                                                                             |
|   | Name:                      Ricard                Leipsic |
|   | Title:                      Vice-President               |
| By:    | */s/                Steven Mayer*                                                                                                                                      |
|   | Name:                      Steven                Mayer   |
|   | Title:                      Director                     |

|   |                                                                                                                                                                             | **ALLIANCE                ATLANTIS COMMUNICATIONS INC.** |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------|
| By:    | */s/                Phyllis Yaffe*                                                                                                                                               |
|   | Name:                      Phyllis                Yaffe            |
|   | Title:                      Chief                Executive Officer |
| By:    | */s/                Michael MacMillan*                                                                                                                                           |
|   | Name:                      Michael                MacMillan        |
|   | Title:                      Executive                Chair         |

----

**EXHIBIT      1**

**FORM      OF PLAN OF ARRANGEMENT **

**PLAN      OF ARRANGEMENT UNDER SECTION 192**

**OF      THE *CANADA BUSINESS CORPORATIONS ACT***

**ARTICLE      1.**

**INTERPRETATION**

| **1.1** | **Definitions** |
|---------|-----------------|

**Acquireco**

**Arrangement**

**Arrangement      Agreement**

**Business      Day**

**Cash      Amount**

**CBCA**
*Canada Business Corporations Act*

**Circular**

**Class      A Shareholder**

**Class      B Shareholder**

**Class      A Shares**

**Class      B Shares**

**Compensation      Plans**

----

**Corporation**

**Court**

**Depositary**

**Director**

**Dissent      Rights**

**Dissenting      Shareholder**

**Effective      Date**

**Effective      Time**

**Final      Order**

**Interim      Order**

**ITA**
*Income Tax Act *

**Letter      of Transmittal**

**Meeting**

**Options**

**Person**

**Plan      of Arrangement**

----

**Purchase      Rights**

**Guarantors**

**Qualifying      Holdco**

**Qualifying      Holdco Shares**

**Qualifying      Holdco Shareholder**

**Shares**

**Shareholder**

**Special      Resolution**

| **1.2** | **Interpretation                Not Affected by Headings,                etc.** |
|---------|---------------------------------------------------------------------------------|

| **1.3** | **Currency** |
|---------|--------------|

| **1.4** | **Number,                etc.** |
|---------|---------------------------------|

*vice versa*

| **1.5** | **Statutory                References** |
|---------|-----------------------------------------|

| **1.6** | **Date                for Any Action** |
|---------|----------------------------------------|

----

**1.7           Time**

**ARTICLE      2.**

**THE      ARRANGEMENT**

| **2.1** | **Arrangement                Agreement** |
|---------|------------------------------------------|

| **2.2** | **Binding                Effect** |
|---------|-----------------------------------|

| **2.3** | **Effective                Time** |
|---------|-----------------------------------|

|   | (a) | each                Share outstanding immediately prior to the Effective Time (other                than a                Share described in section 3.1(a) or a Share held by a Qualifying                Holdco                in respect of which the Holdco Alternative has been validly elected)                shall                be transferred by the holder thereof to Acquireco in exchange for                the Cash                Amount, and the name of each such holder will be removed from the                register                of holders of Shares and Acquireco will be recorded as the registered                holder of such Share and will be deemed to be the legal and beneficial                owner thereof free and clear of any liens, claims or                encumbrances; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | all                of the shares outstanding immediately prior to the Effective Time                of each                Qualifying Holdco in respect of which the Holdco Alternative has                been                validly elected shall be transferred by the holders thereof to Acquireco                in exchange for an aggregate amount equal to the product of the Cash                Amount and the total number of Shares beneficially owned by such                Qualifying Holdco, and the name of each such holder of shares of                such                Qualifying Holdco will be removed from the register of holders of                shares                of such Qualifying Holdco and Acquireco will be recorded as the registered                holder of such shares of such Qualifying Holdco and will be deemed                to be                the legal and beneficial owner thereof free and clear of any liens,                claims                or encumbrances; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | each                Option and Purchase Right outstanding immediately prior to the Effective                Time, whether or not vested, shall be cancelled;                and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | the                Compensation Plans shall be                terminated. |
|--------|-----|---------------------------------------------------------------------------|

----

|   | **Article                3.** |
|--------|-------------------------------|

|   | **RIGHTS                OF DISSENT** |
|--------|--------------------------------------|

| **3.1** | **Rights                of Dissent** |
|---------|--------------------------------------|

**Dissent Rights**

|   | (a) | are                ultimately entitled to be paid fair value for their Shares shall                be deemed                to have transferred such Shares to Acquireco on the Effective Date                contemporaneously with the event described in section 2.3(a) without                any                further act or formality and free and clear of all liens, claims                and                encumbrances, with Acquireco being obligated to pay such Shareholders                in                consideration therefor the fair value of such Shares, which fair                value,                notwithstanding anything to the contrary in the CBCA, if permitted                by the                Court, shall be determined as of the Effective Time, and the name                of each                such Shareholder will be removed from the register of holders of                Shares                and Acquireco will be recorded as the registered holder of the Shares                so                transferred and will be deemed to be the legal and beneficial owner                of                such Shares free and clear of any liens, claims or encumbrances;                or |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | for                any reason are ultimately not entitled to be paid fair value for                their                Shares shall be deemed to have participated in the Arrangement on                the same                basis as any non-dissenting Shareholder who is not a Qualifying Holdco                or                Qualifying Holdco Shareholder as at and from the Effective Time,                and shall                be deemed to have transferred their Shares to Acquireco under section                2.3(a), |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      4.**

**CERTIFICATES      AND PAYMENTS**

| **4.1** | **Exchange                of Certificates for Cash** |
|---------|------------------------------------------------------|

|   | (a) | At                or before the time of issuance of the Certificate of Arrangement,                Acquireco shall deposit sufficient cash with the Depositary for the                benefit of Shareholders to give effect to this Plan of                Arrangement.  Upon surrender to the Depositary for cancellation                of a certificate which immediately prior to the Effective Time represented                outstanding Shares that were exchanged for cash, together with a                duly                completed and executed Letter of Transmittal and such additional                documents                and instruments as the Depositary may reasonably require, the Shareholder                of such surrendered certificate shall be entitled to receive in exchange                therefor, and the Depositary shall deliver to such Shareholder, the                cash                which such Shareholder has the right to receive under the Arrangement                for                such Shares, less any amountswithheld pursuant to section 4.3 and                any                certificate so surrendered shall forthwith be cancelled.  The                cash deposited with the Depositary shall be held in an interest-bearing                account, and any interest earned on such funds shall be for the account                of                Acquireco.  For the purposes of this section 4.1(a), references                to “Shareholders” shall exclude Qualifying Holdcos described in section                2.3(b) and shall include Qualifying Holdco Shareholders described                in                section 2.3(b) and such Qualifying Holdco Shareholders shall be considered                to own Shares owned by their Qualifying                Holdcos. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Until                surrendered as contemplated by this section 4.1, each certificate                which                immediately prior to the Effective Time represented Shares shall                be deemed                after the Effective Time to represent only the right to receive upon                such                surrender a cash payment in lieu of such certificate as contemplated                in                this section 4.1, less any amounts withheld pursuant to section                4.3.  Any such certificate formerly representing Shares not duly                surrendered on or before the sixth anniversary of the Effective Date                shall                cease to represent a claim by or interest of any former Shareholder                of any                kind or nature against or in the Company or Acquireco.  On such                date, all Acquireco cash to which such former holder was entitled                shall be                deemed to have been surrendered to                Acquireco. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4.2** | **Lost                Certificates** |
|---------|--------------------------------------|

| **4.3** | **Withholding                Rights** |
|---------|---------------------------------------|

----

**ARTICLE      5.**

**AMENDMENTS**

| **5.1** | **Amendments                to Plan of Arrangement** |
|---------|------------------------------------------------------|

|   | (a) | The                Corporation may amend, modify and/or supplement this Plan of Arrangement                at any time and from time to time prior to the Effective Date,                *provided*that each such amendment, modification and/or supplement                must (i) be set out in writing, (ii) be approved by Acquireco, (iii)                filed                with the Court and, if made following the Meeting, approved by the                Court,                and (iv) communicated to Shareholders if and as required by the                Court. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Any                amendment, modification or supplement to this Plan of Arrangement                may be                proposed by the Corporation at any time prior to the Meeting (provided                that Acquireco shall have consented thereto acting reasonably) with                or                without any other prior notice or communication, and if so proposed                and                accepted by the Persons voting at the Meeting (other than as may                be                required under the Interim Order), shall become part of this Plan                of                Arrangement for all purposes. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Any                amendment, modification or supplement to this Plan of Arrangement                that is                approved or directed by the Court following the Meeting shall be                effective                only if (i) it is consented to by each of the Corporation and Acquireco                (in each case, acting reasonably) and (ii) if required by the Court,                it is                consented to by Shareholders voting in the manner directed by the                Court. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Any                amendment, modification or supplement to this Plan of Arrangement                may be                made following the Effective Date unilaterally by Acquireco,                *provided* that it concerns a matter which, in the reasonable                opinion of Acquireco, is of an administrative nature required to                better                give effect to the implementation of this Plan of Arrangement and                is not                adverse to the economic interest of any former                Shareholder. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      6.**

**FURTHER      ASSURANCES**

| **6.1** | Notwithstanding                that the transactions and events set out herein shall occur and shall                be                deemed to occur in the order set out in this Plan of Arrangement                without                any further act or formality, each of the parties to the Arrangement                Agreement shall make, do and execute, or cause to be made, done and                executed, all such further acts, deeds, agreements, transfers, assurances,                instruments or documents as may reasonably be required by any of                them in                order further to document or evidence any of the transactions or                events                set out herein. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SCHEDULE      1.1(a)**

**CRTC      REGULATED COMPANIES**

| 1. | HGTV                Canada Inc. |
|----|---------------------------------|

| 2. | Life                Network Inc. |
|----|----------------------------------|

| 3. | Showcase                Television Inc. |
|----|-----------------------------------------|

| 4. | History                Television Inc. |
|----|----------------------------------------|

| 5. | Food                Network Canada Inc. |
|----|-----------------------------------------|

| 6. | Alliance                Atlantis Broadcasting Inc. (as a partner in the Historia/Series+                partnership) |
|----|----------------------------------------------------------------------------------------------------------------------|

| 7. | The                Score Television Network Ltd. |
|----|--------------------------------------------------|

| 8. | Discovery                Health Channel Canada ULC |
|----|----------------------------------------------------|

| 9. | Jasper                Broadcasting Inc. |
|----|-----------------------------------------|

| 10. | Jasper                Junior Broadcasting Inc. |
|-----|------------------------------------------------|

| 11. | NGC                Channel Inc. |
|-----|---------------------------------|

| 12. | ONE:                The Body, Mind & Spirit Channel                Inc. |
|-----|-----------------------------------------------------------------------------|

| 13. | 3924181                Canada Inc. |
|-----|------------------------------------|

----

**SCHEDULE      5.1(k)**

**ERISA      COMPLIANCE COMPANIES**

----