<PAGE>
                                                                    EXHIBIT 10.1




                         LIONS GATE ENTERTAINMENT CORP.

                          LIONS GATE ENTERTAINMENT INC.

             2.9375% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2024

                               PURCHASE AGREEMENT

                                                              September 29, 2004

SG COWEN & CO., LLC
THOMAS WEISEL PARTNERS LLC
c/o SG Cowen & Co., LLC
1221 Avenue of the Americas
New York, New York 10020

Dear Sirs:


      1. INTRODUCTORY. Lions Gate Entertainment Inc., a Delaware corporation
(the "Issuer"), proposes to sell, pursuant to the terms of this Agreement, to
the several initial purchasers named in Schedule A hereto (the "Initial
Purchasers," or, each, an "Initial Purchaser"), $125,000,000 aggregate principal
amount of its 2.9375% Convertible Senior Subordinated Notes Due 2024 (the "Firm
Notes"). In addition, the Issuer proposes to grant to the Initial Purchasers the
option to purchase from the Issuer some or all of the Option Notes (as defined
in Section 8 below). The Firm Notes and the Option Notes are hereinafter
collectively sometimes referred to as the "Notes." The Notes will have the terms
and provisions that are described in the Memorandum (as defined below) under the
heading "Description of the Notes" and are to be issued pursuant to an Indenture
dated as of October 4, 2004 (the "Indenture") to be entered into among the
Issuer, Lions Gate Entertainment Corp., a British Columbia corporation (the
"Company") and J. P. Morgan Trust Company, National Association, as trustee (the
"Trustee"). Payment of principal and interest on the Notes will be fully and
unconditionally guaranteed, jointly and severally, on a senior subordinated
basis (the "Guarantee") by the Company. Subject to certain conditions, the Notes
will be convertible into common shares, no par value, of the Company (the
"Common Shares").

      The Notes will be offered and sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (together with the rules
and regulations promulgated thereunder, the "Securities Act"), in reliance upon
an exemption therefrom. The Issuer has prepared a preliminary offering
memorandum dated September 28, 2004 (the "Preliminary Offering Memorandum") and
will prepare an offering memorandum dated the date hereof (the "Offering
Memorandum" and, together with the Preliminary Offering Memorandum, the
"Memorandum") setting forth information concerning the Issuer, the Company and
the Notes. The Memorandum will incorporate by reference the Company's (i) Annual
Report on Form 10-K for the year ended March 31, 2004, (ii) Quarterly Report on
Form 10-Q for the quarter ended June 30, 2004, (iii) Proxy Statement for the
annual meeting of shareholders of the Company held on September 14, 2004 and
(iv) Current Report on Form 8-K filed with the Commission (as defined below) on
September 28, 2004 (other than information in the documents that is deemed not
to be filed with the Commission) (all such documents listed in clauses (i)
through (iv) referred to herein as the "Incorporated Documents"). Copies of the
Preliminary Offering Memorandum have been, and copies of the Offering

                                       1
<PAGE>
            (i)   trading in securities of the Company or in securities
                  generally on the Toronto Stock Exchange, New York Stock
                  Exchange or the Nasdaq National Market shall have been
                  suspended or materially limited or minimum or maximum prices
                  shall have been established on any such exchange or market;

            (ii)  a banking moratorium shall have been declared by United States
                  Federal or state authorities, or Canadian federal or
                  provincial authorities, a moratorium in foreign exchange
                  trading by major international banks or persons shall have
                  been declared, or a material disruption should have occurred
                  in commercial banking or securities settlement or clearance
                  services in the United States or Canada;

            (iii) there shall have been (A) a declaration of a national
                  emergency or war by the United States, or an outbreak or
                  escalation of hostilities between the United States and any
                  foreign power, or (B) an outbreak or escalation of any other
                  insurrection or armed conflict involving the United States or
                  any other national or international crisis, calamity or
                  emergency, or (C) any material change in the political
                  conditions, financial markets or economic conditions of the
                  United States which, in the case of (A), (B) or (C) above, in
                  the judgment of the Initial Purchasers, makes it impracticable
                  or inadvisable to proceed with the issuance, sale or the
                  delivery of the Notes as contemplated by the Memorandum;

            (iv)  any securities of the Company or the Issuer shall have been
                  downgraded or placed on any "watch list" for possible
                  downgrading by any "nationally recognized statistical rating
                  organization" as defined for purposes of Rule 436(g) under the
                  Securities Act; or

            (v)   there shall have occurred such a material adverse change in
                  general economic, political or financial conditions (or the
                  effect of international conditions on the financial markets in
                  the United States shall be such) as to make it, in the
                  judgment of the Initial Purchasers, impracticable or
                  inadvisable to proceed with the issuance, sale or the delivery
                  of the Notes as contemplated in the Memorandum.

      (b)   Either the Initial Purchasers or the Issuer may terminate this
            Agreement at any time on 10 days' prior written notice.

      (c)   Termination of this Agreement pursuant to this Section 9 shall be
            without liability of any party to any other party except as provided
            in Section 10 hereof.

      10. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If (a) this Agreement
shall have been terminated pursuant to Section 9(a) or 11, (b) the Issuer shall
fail to tender the Notes for delivery to the Initial Purchasers for any reason
permitted under this Agreement, or (c) the Initial Purchasers shall decline to
purchase the Notes for any reason permitted under this Agreement, the Company
shall reimburse the Initial Purchasers for the reasonable fees and expenses of
their counsel and for such other out-of-pocket expenses as shall have been
reasonably incurred by them in connection with this Agreement and the proposed
purchase of the Notes, and upon demand the Company shall pay the full amount
thereof to the Initial Purchasers. If this Agreement is terminated pursuant to
Section 11 by reason of the default of one or more Initial Purchasers, the
Company shall not be obligated to reimburse any defaulting Initial Purchaser on
account of those expenses.

      11. SUBSTITUTION OF INITIAL PURCHASERS. If any Initial Purchaser or
Initial Purchasers shall default in its or their obligations to purchase shares
of Notes hereunder and the aggregate number of shares which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed to purchase does not
exceed ten percent (10%) of the principal amount of Notes underwritten, the
other Initial Purchasers shall be obligated


                                       24
<PAGE>
severally, in proportion to their respective commitments hereunder, to purchase
the Notes which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase. If any Initial Purchaser or Initial Purchasers shall so
default and the aggregate principal amount with respect to which such default or
defaults occur is more than ten percent (10%) of the total principal amount
underwritten and arrangements satisfactory to SG Cowen and the Company for the
purchase of such Notes by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.

      If the remaining Initial Purchasers or substituted Initial Purchasers are
required hereby or agree to take up all or part of the Notes of a defaulting
Initial Purchaser or Initial Purchasers as provided in this Section 11, (i) the
Company shall have the right to postpone the Closing Date for a period of not
more than five (5) full business days in order that the Company may effect
whatever changes may thereby be made necessary in the Offering Memorandum, or in
any other documents or arrangements, and (ii) the respective principal amount to
be purchased by the remaining Initial Purchasers or substituted Initial
Purchasers shall be taken as the basis of their underwriting obligation for all
purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Initial Purchaser of its liability to the Company or the other
Initial Purchasers for damages occasioned by its default hereunder. Any
termination of this Agreement pursuant to this Section 11 shall be without
liability on the part of any non-defaulting Initial Purchaser or the Company,
except expenses to be paid or reimbursed pursuant to Sections 5 and 10 and
except the provisions of Section 7 shall not terminate and shall remain in
effect.

      12. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the several Initial
Purchasers, the Company, the Issuer and their respective successors, legal
representatives and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person other than the persons
mentioned in the preceding sentence any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person; except that the representations, warranties, covenants,
agreements and indemnities of the Company and the Issuer contained in this
Agreement shall also be for the benefit of the Initial Purchaser Indemnified
Parties, and the indemnities of the several Initial Purchasers shall also be for
the benefit of the Company Indemnified Parties.

      13. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
representations, warranties, agreements, covenants and other statements of the
Company and the Issuer and their respective officers set forth in this Agreement
or made by or on behalf of them pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
any of the Initial Purchasers, any of their respective officers or directors, or
any controlling person referred to in Section 7 hereof and (ii) delivery of and
payment for the Notes to and by the Initial Purchasers, and shall be binding
upon and shall inure to the benefit of, any successors, assigns, heirs, personal
representatives of the Company, the Initial Purchasers and the indemnified
parties referred to herein. The indemnities of the Company and the Issuer shall
survive any termination and shall survive the Closing Date.

      14. NOTICES. All statements, requests, notices and agreements hereunder
shall be in writing, and:

      (a)   if to one or more of the Initial Purchasers, shall be delivered or
            sent by mail, telex or facsimile transmission to SG Cowen & Co.,
            LLC, Attention: General Counsel, 1221 Avenue of the Americas, New
            York, New York 10020 (Fax: 212-278-7995); and

      (b)   if to the Company or the Issuer shall be delivered or sent by mail,
            telex or facsimile transmission to Lions Gate Entertainment Corp.,
            Attention: Wayne Levin, 2700 Colorado Avenue, Suite 200, Santa
            Monica, California 90404 (Fax: 310-255-3860).


                                       25
<PAGE>
      15. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a)
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading; (b) "subsidiary" has the meaning set forth in Rule 405 of the
Securities Act; provided, however, that solely for purposes of this Agreement
the term "subsidiary" shall include the Issuer; and (c) "Significant Subsidiary"
has the meaning set forth in Section 1-02(w) of Regulation S-X of the
Commission; provided, however, that solely for purposes of this Agreement the
term "Significant Subsidiary" shall include the Issuer.

      16. INFORMATION.

      (a)   Each of the Company and the Issuer will provide the Initial
            Purchasers with such information as the Initial Purchasers
            reasonably request and believe is appropriate to their assignment,
            including the Memorandum (and all such information so furnished,
            being hereinafter referred to as the "Information").

      (b)   Each of the Company and the Issuer understands and agrees that
            Initial Purchasers will rely on the Information and other
            information available from generally recognized public sources
            without having independently verified the same and that the Initial
            Purchasers assume no responsibility for the accuracy or completeness
            of this information.

      17. DISCLOSURE. Each of the Company and the Issuer agrees that any
information or advice rendered by the Initial Purchasers or their
representatives in connection with this Agreement is solely for the confidential
use of the Company and the Issuer and, except as otherwise required by
applicable law, regulation or legal process, neither the Company nor the Issuer
will, and will not permit any third party to, disclose, reproduce, disseminate,
quote or otherwise refer to such advice or information in any manner without the
Initial Purchasers' prior written consent, which consent shall not be
unreasonably withheld.

      18. INITIAL PURCHASERS' INFORMATION. The parties hereto acknowledge and
agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the statements concerning the Initial Purchasers
contained in the first and fourth paragraphs under the heading "Plan of
Distribution."

      19. AMENDMENTS. This Agreement may not be waived, amended, modified or
assigned, in any way, in whole or in part, including by operation of law,
without the prior written consent of the Company and the Issuer and the Initial
Purchasers.

      20. GOVERNING LAW AND JURISDICTION. This letter and any claim or dispute
of any kind or nature whatsoever arising out of or in any way relating to this
Agreement, directly or indirectly (including any claim concerning advice
provided pursuant to this Agreement), shall be governed by and construed in
accordance with the laws of the State of New York. ANY RIGHTS TO TRIAL BY JURY
WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO, OR ARISING OUT OF, THIS
AGREEMENT ARE WAIVED BY THE INITIAL PURCHASERS, THE COMPANY AND THE ISSUER.

      21. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.

      22. GENERAL. This Agreement (together with the schedules, exhibits and
annexes attached hereto and incorporated by reference herein) constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. In this Agreement, the
masculine, feminine and neuter genders and the singular and the plural include
one another. The section headings in this Agreement are for the convenience of
the parties only and will not affect the construction or interpretation of this
Agreement.


                                       26
<PAGE>
      23. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.


                                       27
<PAGE>
      If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement between the Company and the
Issuer, on the one hand, and the Initial Purchasers, on the other hand.

                                 Very truly yours,

                                            LIONS GATE ENTERTAINMENT CORP.


                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

                                            LIONS GATE ENTERTAINMENT INC.


                                            By:
                                                --------------------------------
                                            Name:
                                            Title:



                     [SIGNATURE PAGE TO PURCHASE AGREEMENT]
<PAGE>
The foregoing Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first above written.

SG COWEN & CO., LLC


By:
     ------------------------------------------------
     Name:
     Title:


THOMAS WEISEL PARTNERS LLC


By:
     ------------------------------------------------
     Name:
     Title:


                     [SIGNATURE PAGE TO PURCHASE AGREEMENT]
<PAGE>
                                   SCHEDULE A

                               Initial Purchasers

<TABLE>
<CAPTION>
Purchaser                                              Principal Amount of Notes
---------                                              -------------------------
<S>                                                    <C>
SG Cowen & Co., LLC                                          $131,250,000

Thomas Weisel Partners LLC                                    $18,750,000
</TABLE>


                                       1
<PAGE>
                                    EXHIBIT I

                           [Form of Lock-Up Agreement]

                                                                          [Date]
SG Cowen & Co., LLC
1221 Avenue of the Americas
New York, New York  10020

Re: Lions Gate Entertainment Inc. 2.9375% Convertible Senior Subordinated Notes
Due 2024

Ladies and Gentlemen:

      In order to induce SG Cowen & Co., LLC ("SG Cowen") and Thomas Weisel
Partners LLC to enter in to a certain Purchase Agreement with Lions Gate
Entertainment Corp., a British Columbia corporation (the "Company"), and Lions
Gate Entertainment Inc., a Delaware corporation (the "Issuer"), with respect to
the private placement of 2.9375% Convertible Senior Subordinated Notes due 2024
(the "Notes") issued by the Issuer (the "Private Placement"), the undersigned
hereby agrees that, prior to December 28, 2004, the undersigned will not,
without the prior written consent of SG Cowen, directly or indirectly, (i)
offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose
of, any common shares, no par value ("Common Shares") of the Company (including,
without limitation, Common Shares which may be deemed to be beneficially owned
by the undersigned in accordance with the rules and regulations promulgated
under the Securities Act, as the same may be amended or supplemented from time
to time (such shares, the "Beneficially Owned Shares")) or securities
convertible into or exercisable or exchangeable in Common Shares (such
securities, together with the Common Shares and Beneficially Owned Shares, the
"Relevant Securities"), (ii) enter into any swap, hedge or similar agreement or
arrangement that transfers in whole or in part, the economic risk of ownership
of the Relevant Securities or (iii) engage in any short selling of the Common
Shares (collectively, the "Lock-Up").

      Notwithstanding the foregoing, the undersigned may transfer Relevant
Securities (i) by bona fide gift, (ii) will or intestate succession, and (iii)
to any trust for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned, provided as to each of (ii) and (iii)
above, each resulting transferee of Relevant Securities executes and delivers to
you an agreement certifying that such transferee is bound by the terms of this
letter agreement, and provided further that any such transfer not involve a
disposition for value. For the purposes of this letter agreement, "immediate
family" means any relationship by blood, marriage or adoptions, not more remote
than first cousin.

      In addition, the undersigned hereby waives, from the date hereof until
December 28, 2004, any and all rights, if any, to request or demand registration
pursuant to the Securities Act of any Common Shares that are registered in the
name of the undersigned or that are Beneficially Owned Shares. In order to
enable the aforesaid covenants to be enforced, the undersigned hereby consents
to the placing of stop-transfer orders with the transfer agent of the Common
Shares with respect to any Common Shares or Beneficially Owned Shares.

      In the event that the Purchase Agreement is terminated prior to the time
of purchase of the Notes by the Initial Purchasers, the undersigned shall no
longer be subject to the Lock-Up set forth in this letter agreement and such
Lock-Up shall immediately terminate.


                                       1
<PAGE>
      Delivery of a signed copy of this letter agreement by facsimile
transmission shall be effective as delivery of the original hereof.

                                                 -----------------------------
                                                    Name:


                                       2
<PAGE>
                                     ANNEX I

                                    Officers

Jon Feltheimer

Michael Burns

Wayne Levin

James Keegan


                                       1
<PAGE>
                                    ANNEX II

                        [Form of opinion of U.S. counsel]


      1.    Each of Lions Gate Entertainment Inc., (the "Issuer"), and Lions
            Gate Films Inc., Lions Gate Television Inc., LG Pictures Inc.,
            Artisan Home Entertainment Inc., Artisan Pictures Inc. and Artisan
            Releasing Inc. has been duly incorporated and is a corporation
            validly existing under the laws of the State of Delaware, with
            corporate power to own its properties and assets and to carry on its
            business as described in the Memorandum.

      2.    Based solely on a review of good standing certificates, each of the
            Issuer, Lions Gate Films Inc., Lions Gate Television Inc., LG
            Pictures Inc., Film Holdings Co., Artisan Home Entertainment Inc.,
            Artisan Pictures Inc. and Artisan Releasing Inc. are qualified as
            foreign corporations to do business in the State of California, and
            are in good standing in the State of California, and Lions Gate
            Films Inc. is qualified as a foreign corporation to do business in
            the State of New York, and is in good standing in the State of New
            York.

      3.    The outstanding shares of capital stock of the Issuer have been duly
            authorized by all necessary corporate action on the part of the
            Issuer, are validly issued, fully paid and non-assessable. Based
            solely on a review of records certified to such counsel as the
            Certificate of Incorporation and Bylaws of the Issuer and its
            corporate minute books, to the best of such counsel's knowledge, the
            shares of capital stock are owned free and clear of any security
            interest, mortgage, pledge, lien, encumbrance, claim or equity,
            except under the Amended and Restated Credit, Security, Guaranty and
            Pledge Agreement by and among the Company, the subsidiaries referred
            to therein, and the lenders referred to therein, dated as of
            December 15, 2003, as amended to date.

      4.    The execution and delivery by the Issuer of the Agreement do not,
            and the performance of its obligations under the Agreement will not,
            (a) violate its Certificate of Incorporation or Bylaws, (b) violate,
            breach, or result in a default under, any existing obligation of or
            restriction on it under any other agreement identified in Exhibit A
            to the opinion (the "Other Agreements"), or (c) breach or otherwise
            violate any existing obligation of or restriction on it under any
            order, judgment or decree of any California, New York or U.S.
            federal court or governmental authority binding on the Issuer (as
            identified in a certificate provided by the Company). Such counsel
            need express no opinion as to the effect of the Issuer's performance
            of its obligations in the Agreement on the its compliance with
            financial covenants in the Other Agreements.

      5.    The execution and delivery by the Issuer of the Agreement do not,
            and the performance of its obligations under the Agreement will not,
            violate the current Delaware General Corporation Law or any current
            California, New York or U.S. federal statute, rule or regulation
            that such counsel has, in the exercise of customary professional
            diligence, recognized as applicable to the Company or to
            transactions of the type contemplated by the Agreement. However,
            such counsel need express no opinion with respect to any anti-fraud
            provisions of federal securities laws or with respect to any
            anti-fraud provisions of Blue Sky or state securities laws, and
            further, such counsel need express no opinion with respect to
            Section 7 of the Agreement except as otherwise expressly stated
            herein.

      6.    Assuming the accuracy of the Initial Purchasers' representations in
            the Agreement executed by each of them as of the Closing Date, it is
            not necessary in connection with the sale of the Notes under the
            circumstances contemplated by the Agreement to register the Notes
            under


                                       1
<PAGE>
            the 1933 Act, as amended, or to qualify an indenture in respect
            thereof under the Trust Indenture Act of 1939, as amended.

      7.    No order, consent, permit or approval of, or filing or registration
            with, any California, New York or U.S. federal governmental
            authority is required on the part of the Company or the Issuer for
            the execution and delivery of the Agreement or for the issuance and
            sale of the Notes, except such as have been obtained under the Act
            and such as may be required under applicable Blue Sky or state
            securities laws.

      8.    The execution, delivery and performance of the Indenture have been
            duly authorized by all necessary corporate action on the part of the
            Issuer, and the Indenture has been duly executed and delivered by
            the Issuer. Assuming due authorization, execution and delivery by
            the Trustee and the Issuer, the Indenture constitutes the legally
            valid and binding obligation of the Issuer, enforceable against the
            Issuer in accordance with its terms, except as may be limited by
            bankruptcy, insolvency, reorganization, moratorium or similar laws
            relating to or affecting creditors' rights generally (including,
            without limitation, fraudulent conveyance laws) and by general
            principles of equity, including, without limitation, concepts of
            materiality, reasonableness, good faith and fair dealing and the
            possible unavailability of specific performance or injunctive
            relief, regardless of whether considered in a proceeding in equity
            or at law.

      9.    The execution, delivery and performance of the Registration Rights
            Agreement have been duly authorized by all necessary corporate
            action on the part of the Issuer, and the Registration Rights
            Agreement has been duly executed and delivered by the Issuer.
            Assuming due authorization, execution and delivery by the Initial
            Purchasers and the Company, the Registration Rights Agreement
            constitutes the legally valid and binding obligation of the Issuer,
            enforceable against the Issuer in accordance with its terms, except
            as may be limited by bankruptcy, insolvency, reorganization,
            moratorium or similar laws relating to or affecting creditors'
            rights generally (including, without limitation, fraudulent
            conveyance laws) and by general principles of equity, including,
            without limitation, concepts of materiality, reasonableness, good
            faith and fair dealing and the possible unavailability of specific
            performance or injunctive relief, regardless of whether considered
            in a proceeding in equity or at law. The execution and delivery by
            the Issuer of the Registration Rights Agreement do not, and the
            Issuer's performance of its obligations under the Registration
            Rights Agreement will not, violate the current Delaware General
            Corporation Law or any current California, New York or federal
            statute, rule or regulation that such counsel has, in the exercise
            of customary professional diligence, recognized as applicable to the
            Issuer or to transactions of the type contemplated by the
            Registration Rights Agreement except that such counsel need express
            no opinion regarding, any federal securities laws, or Blue Sky or
            state securities laws, or Section 7 of the Registration Rights
            Agreement except as otherwise expressly stated herein.

      10.   The Notes have been duly authorized by all necessary corporate
            action on the part of the Issuer, and when executed and
            authenticated in accordance with the terms of the Indenture and
            delivered to and paid for by the Issuer, will constitute the legally
            valid and binding obligation of the Issuer, and be enforceable
            against the Issuer in accordance with their terms, except as may be
            limited by bankruptcy, insolvency, reorganization, moratorium or
            similar laws relating to or affecting creditors' rights generally
            (including, without limitation, fraudulent conveyance laws) and by
            general principles of equity, including, without limitation,
            concepts of materiality, reasonableness, good faith and fair dealing
            and the possible unavailability of specific performance or
            injunctive relief, regardless of whether considered in a proceeding
            in equity or at law.


                                       2
<PAGE>
      11.   The statements in the Offering Memorandum under the caption
            "Taxation," insofar as they summarize provisions of U.S. federal
            law, fairly summarize the matters described therein in all material
            respects.

      12.   There are no actions, suits or proceedings pending or threatened
            against the Company or the Issuer or any of their respective
            subsidiaries, with respect to which such counsel has given
            substantive attention on behalf of the Company or the Issuer or any
            of their respective subsidiaries.

      13.   The documents incorporated by reference in the Offering Memorandum
            (the "Incorporated Documents"), on the respective dates they were
            filed, appeared on their face to comply in all material respects
            with the requirements as to form for reports on Form 10-K, Form 10-Q
            and Form 8-K, as the case may be, under the Exchange Act, as
            amended, and the related rules and regulations in effect at the
            respective dates of their filing, except that such counsel need
            express no opinion concerning the financial statements and other
            financial information contained or incorporated by reference
            therein.

      14.   The Indenture complies in all material respects with the
            requirements as to form under the Trust Indenture Act, as amended.

      15.   The Issuer is not an "investment company" required to register under
            the Investment Company Act of 1940, as amended.


In addition, such counsel will state that such counsel has participated in
conferences in connection with the preparation of the Offering Memorandum. Such
counsel has also reviewed the Offering Memorandum and the Incorporated
Documents, but has not independently verified the accuracy, completeness or
fairness of the statements contained or incorporated in those documents. The
limitations inherent in such counsel's participation and review, and in the
knowledge available to such counsel, are such that it is unable to assume, and
does not assume, any responsibility for such accuracy, completeness or fairness
(except as otherwise specifically stated in paragraph 11 above). However, on the
basis of such participation and review, such counsel does not believe that the
Offering Memorandum and the Incorporated Documents, considered as a whole as of
the date of the Offering Memorandum and as of the date hereof, contain any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Such counsel need express no opinion
or belief as to any document filed by the Issuer under the Exchange Act whether
before or after the date of the Offering Memorandum, except to the extent that
any such document is an Incorporated Document read together with the Offering
Memorandum and considered as a whole, nor does such counsel need express any
opinion or belief as to the financial statements and other financial information
contained in the Offering Memorandum or the Incorporated Documents.


                                       3
<PAGE>
                                    ANNEX III

                      [Form of opinion of Canadian counsel]

1. The Company and the Principal Canadian Subsidiary have been duly incorporated
and are validly existing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not have, singularly or in the
aggregate, a Material Adverse Effect.

2. The Company has an authorized share structure as set forth in the Memorandum,
and all of the outstanding shares of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to the
description thereof contained in the Memorandum.

3. The Common Shares issuable by the Company to the Issuer in connection with
the conversion of the Notes have been reserved by the Company for issuance.

4. When the Common Shares issuable by the Company to the Issuer in connection
with the conversion of the Notes are issued in accordance with the terms of the
Notes and the Contribution Agreement, such Common Shares will be duly authorized
and validly issued will be fully paid, non-assessable and free of any
pre-emptive or similar rights.

5. All the outstanding shares of the Principal Canadian Subsidiary have been
duly authorized and validly issued, are fully paid and non-assessable and are
owned by the Company directly, free and clear of any claim, lien, encumbrance,
security interest (except for those granted under existing credit facilities
referred to in the Memorandum) restriction upon voting or transfer or any other
claim of any third party.

6. The shares of the Principal Canadian Subsidiary previously held by Frank
Guistra in trust for the Principal Canadian Subsidiary, the Company and its
subsidiaries have been validly transferred to the Company.

7. The Company is a reporting issuer in each of the provinces of British
Columbia and Ontario and, in British Columbia, is not on the list of defaulting
issuers maintained by the securities regulatory authorities in such
jurisdiction. In Ontario, the Company is included in a list of defaulting
reporting issuers maintained by the Ontario Securities Commission under
subsection 79(2) of the Securities Act (Ontario) because the Company has not
paid fees required by Ontario securities law.

8. To the best of such counsel's knowledge and other than as set forth in the
Memorandum, there are no Canadian federal or provincial legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property or asset of the Company or any of its subsidiaries is
the subject which, singularly or in the aggregate, if determined adversely to
the Company or any of its subsidiaries, might have a Material Adverse Effect or
would prevent or adversely affect the ability of the Company to perform its
obligations under the Purchase Agreement; and, to the best of such counsel's
knowledge, no such proceedings have been threatened by governmental authorities
or others.

9. To the best of such counsel's knowledge, neither the Company nor the
Principal Canadian Subsidiary (a) is in violation of its constating documents,
(b) is in default, and no event has occurred, which, with notice or lapse of
time or both, would constitute a default, in the due performance or


                                       4
<PAGE>
observance of any term, covenant or condition contained in any agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties or assets is subject or (c) is in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any license, permit, certificate,
franchise or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business except, in the case
of clauses (b) and (c), for those defaults, violations or failures which, either
singularly or in the aggregate, would not have a Material Adverse Effect.

10. There are no preemptive or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any Common Shares pursuant to
the Company's constating documents or any agreement or other instrument known to
such counsel.

11. There are no restrictions of the corporate power and capacity of the Company
to enter into the Purchase Agreement or to carry out its obligations under the
Purchase Agreement; and the Purchase Agreement has been duly authorized, and
executed and delivered by the Company.

12. The execution, delivery and performance of the Purchase Agreement and the
consummation of the transactions contemplated hereby by the Company will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material agreements to which
the Company is a party, nor will such actions result in any violation of the
constating documents of the Company or the constating documents of the Principal
Canadian Subsidiary or any statute or any order, rule or regulation of any
Canadian federal or provincial court or governmental agency or body or court
having jurisdiction over the Company or the Principal Canadian Subsidiary or any
of their properties or assets.

13. Except for consents, approvals, authorizations, registrations or
qualifications as may be required by the Toronto Stock Exchange in connection
with the issuance and sale of the Notes and the issuance of the Common Shares in
connection with the conversion of the Notes, no consent, approval, authorization
or order of, or filing or registration with, any Canadian federal or provincial
court or governmental agency or body is required for the execution, delivery and
performance of the Purchase Agreement by the Company and the consummation of the
transactions contemplated hereby.

14. The form of share certificate for the Common Shares issuable upon conversion
of the Notes has been duly approved by the Company and complies with the
provisions of the constating documents of the Company and the Business
Corporations Act (British Columbia).

15. The statements in the Memorandum under the heading "Certain Canadian Federal
Income Tax Considerations" to the extent that they constitute summaries of
matters of Canadian federal or provincial law or regulation or legal
conclusions, have been reviewed by such counsel and fairly summarize the matters
described therein in all material respects.

16. The statements contained in the Memorandum under the caption "Risk Factors -
We may lose certain benefits by failing to meet certain regulatory requirements"
insofar as such statements purport to summarize the laws of the Provinces of
Ontario or British Columbia and the federal laws of Canada applicable therein,
are fair descriptions of those laws.

17. The Toronto Stock Exchange has conditionally approved the listing of the
Common Shares in accordance with the requirements of such exchange on or before
October 4, 2004.

18. The granting by the Company to the Issuer pursuant to the Contribution
Agreement of the right to receive Common Shares in connection with the
conversion of the Notes is exempt from, or not subject to, the prospectus
requirements of the securities laws of the Provinces of British


                                       5
<PAGE>
Columbia and Ontario (the "Provinces") and no proceedings, consents, approvals,
permits, registrations or filings are required under the securities laws of the
Provinces in order to permit such offering, issue and sale, except for the
filing together with the appropriate fee of a report on Form 45-103F4 with the
British Columbia Securities Commission.

19. The issuance and delivery of the Common Shares by the Company to the Issuer
pursuant to the Contribution Agreement in connection with the conversion of the
Notes, is exempt from, or not subject to, the prospectus requirements of the
securities laws of the Provinces and no proceedings, consents, approvals,
permits, registrations or filings are required under the securities laws of the
Provinces in order to permit such issuance and delivery. Any Common Shares
issued to the Issuer in connection with the conversion of the Notes prior to the
earlier of: (a) four months and one day following the issue date of the Notes
and (b) the issuance of a final receipt for a prospectus in connection with the
qualification of the Common Shares under applicable securities laws of the
Provinces (the "Canadian Prospectus") would be subject to a four month hold
period from the date of the issuance of the Notes and may not be sold in the
Provinces, including through the facilities of the Toronto Stock Exchange, until
the expiry of such hold period. We note that any Common Shares delivered by the
Issuer to holders of the Notes on conversion thereof during such hold period
must have the required legends specified on the certificates representing such
Common Shares pursuant to section 2.5 of Multilateral Instrument 45-102, Resale
of Securities and section 625(b) of the Toronto Stock Exchange Company Manual.

20. The Indenture has been duly authorized, executed and delivered by the
Company, and, assuming due authorization, execution and delivery by the Trustee
and the Issuer, is the legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.

21. The Guarantee has been duly authorized and delivered by the Company, and
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.

22. The Contribution Agreement has been duly authorized by the Company and
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.

23. The choice of the laws of the State of New York ("New York Law") as the
governing law of the Purchase Agreement will be upheld as a valid choice of law
by a court of competent jurisdiction of the Province of Ontario (an "Ontario
Court") and by a court of competent jurisdiction of the Province of British
Columbia (a "British Columbia Court", and together with an Ontario Court, the
"Relevant Canadian Courts") provided that such choice of law is bona fide (in
the sense that it was not made with a view to avoiding the consequences of the
law of any other jurisdiction) and is not contrary to public policy as this term
is understood under the laws of the Province of Ontario ("Ontario Law") or the
laws of British Columbia ("British Columbia Law"), as the case may be. Such
counsel has no reason to believe that the choice of New York Law in the Purchase
Agreement is not bona fide or is contrary to public policy under Ontario Law or
British Columbia Law.

24. In the event that the Purchase Agreement is sought to be enforced in either
an Ontario court or a British Columbia court, those courts would, subject to
subparagraph (23) above, apply


                                       6
<PAGE>
New York Law, upon proper proof of those laws, except to the extent that the
provisions of the Purchase Agreement or New York Law are contrary to public
policy as that term is understood under Ontario Law or BC Law, as the case may
be, or those laws are foreign revenue, expropriatory or penal laws; provided,
however, that:

(a)   a Relevant Canadian Court would not apply New York Law in matters of
      procedure or applicable laws in force which are applicable by reason of
      their particular object; and

(b)   a Relevant Canadian Court may not enforce an obligation enforceable under
      New York Law where performance of the obligation would be illegal by the
      laws of the place of performance.

25. A final and conclusive civil judgment for a sum certain obtained in a court
of competent jurisdiction of the State of New York ("a New York Court") against
the parties hereto in connection with any action arising out of or relating to
the Purchase Agreement would be recognized and could be sued upon in a Relevant
Canadian Court and such court would grant a judgment which would be enforceable
against the parties hereto in the Province of Ontario or the Province of British
Columbia, as the case may be, provided that:

(a)   the New York Court had jurisdiction over the judgment debtor in the action
      according to the applicable law in the Relevant Canadian Court;

(b)   such judgment was not obtained by fraud on the New York Court or in any
      manner contrary to natural justice and the enforcement thereof would not
      be inconsistent with public policy as such term is understood under the
      applicable law in the Relevant Canadian Court;

(c)   enforcement of such judgment would not be inconsistent with public policy
      as such term is understood under the applicable law in the Relevant
      Canadian Court and, in particular, would not constitute, directly or
      indirectly, the enforcement of foreign revenue, expropriatory or penal
      laws;

(d)   a dispute between the same parties based on the same subject matter has
      not given rise to a decision rendered by a Relevant Canadian Court or been
      decided by a foreign authority and that decision meets the necessary
      conditions for recognition under the applicable law in the Relevant
      Canadian Court;

(e)   no new admissible evidence is discovered after the New York Court has
      rendered judgment which could not have been discovered by the exercise of
      due diligence prior to the New York Court rendering judgment and no new
      facts have arisen which once presented before a Relevant Canadian Court
      would give rise to a finding in the Relevant Canadian Court contrary to
      subparagraphs (a), (b) or (c) above;

(f)   a judgment of a Relevant Canadian Court will be denominated in Canadian
      currency in accordance with, in the case of the Province of Ontario, the
      Courts of Justice Act (Ontario), and in the case of the Province of
      British Columbia, the Foreign Money Claims Act (British Columbia); and

(g)   the action in the Relevant Canadian Court commenced within the time limits
      set out in the Limitations Act (Ontario) or the Limitation Act (British
      Columbia), as the case may be.

In addition, such counsel will state that such counsel did not prepare the
Offering Memorandum, and such counsel has not independently verified its
accuracy, completeness or fairness. Accordingly, such counsel is


                                       7
<PAGE>
unable to assume, and such counsel does not assume, any responsibility for the
accuracy, completeness or fairness of the Offering Memorandum (except as
otherwise specifically stated in paragraph 11 above). However, subject to the
foregoing, such counsel does not believe that the Offering Memorandum and the
Incorporated Documents, considered as a whole as of the date hereof, contain any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Such counsel need express no opinion
or belief as to the financial statements and other financial information and
projections contained in the Offering Memorandum or the Incorporated Documents.


                                       8
<PAGE>
Memorandum will be, delivered by the Issuer to the Initial Purchasers pursuant
to the terms of this Agreement. Any references herein to the Memorandum shall be
deemed to include all amendments and supplements thereto and the Incorporated
Documents and any amendments thereto, unless otherwise noted. The Issuer hereby
confirms that it has authorized the use of the Memorandum in connection with the
offering and resale of the Notes by the Initial Purchasers in accordance with
Section 3.

      Holders of the Notes (including the Initial Purchasers and their direct
and indirect transferees) will be entitled to the benefits of a Registration
Rights Agreement, between the Company and the Initial Purchasers (the
"Registration Rights Agreement") pursuant to which the Company and the Issuer
will agree, among other things, to file a registration statement on the
appropriate form with the Securities and Exchange Commission (the "Commission")
registering the Notes and the common shares of the Company to be issued upon the
conversion thereof under the Securities Act. Any common shares issued by the
Company to the Issuer in connection with the conversion of the Notes would be
subject to a four month hold period from the date of issuance of the Notes and
may not be sold in the Province of British Columbia, including through the
facility of the Toronto Stock Exchange, until the expiry of such hold period.
This Agreement, the Notes, the Guarantee, the Indenture and the Registration
Rights Agreement are hereinafter referred to collectively as the "Offering
Documents."

      2. REPRESENTATIONS AND WARRANTIES OF THE ISSUER AND THE COMPANY. The
Issuer and the Company represent and warrant to, and agree, jointly and
severally with, the several Initial Purchasers that:

            (a)   Each of the Preliminary Offering Memorandum and the Offering
                  Memorandum, as of its respective date, did not, and on the
                  Closing Date (as defined below) the Offering Memorandum will
                  not, contain any untrue statement of a material fact or omit
                  to state a material fact required to be stated therein or
                  necessary in order to make the statements therein, in the
                  light of the circumstances under which they were made, not
                  misleading; provided that neither the Issuer nor the Company
                  makes any representation or warranty as to information
                  contained in or omitted from the Preliminary Offering
                  Memorandum or the Offering Memorandum in reliance upon and in
                  conformity with written information relating to the Initial
                  Purchasers furnished to the Issuer and the Company by any
                  Initial Purchaser specifically for inclusion therein, which
                  information the parties agree is limited to the Initial
                  Purchasers' Information (as defined in Section 18). Each of
                  the Preliminary Offering Memorandum and the Offering
                  Memorandum and any amendment or supplement thereto complied
                  with or will comply in all material respects with subsection
                  (d)(4) of Rule 144A promulgated under the Securities Act.

            (b)   Assuming the accuracy of the representations and warranties of
                  the Initial Purchasers contained in Section 3 and their
                  compliance with the agreements set forth therein, it is not
                  necessary, in connection with the issuance and sale of the
                  Notes to the Initial Purchasers and the offer, resale and
                  delivery of the Notes by the Initial Purchasers in the manner
                  contemplated by this Agreement and the Offering Memorandum, to
                  register the Notes under the Securities Act or to qualify the
                  Indenture under the Trust Indenture Act of 1939, as amended
                  (the "Trust Indenture Act").

            (c)   (i) The Company's Annual Report on Form 10-K most recently
                  filed with the Commission (the "Annual Report") and (ii) each
                  subsequent report filed with the Commission pursuant to the
                  Securities Exchange Act of 1934, as amended (the "Exchange
                  Act"), did not, as of their respective dates (or, when read
                  together with the other information in the Memorandum),
                  contain any untrue statement of a material fact or omit to
                  state any material fact necessary to make the statements
                  therein not misleading. Such documents, when they were filed
                  with the Commission, conformed in all material respects to the
                  requirements of the Exchange Act and the rules and regulations
                  of the Commission

                                       2
<PAGE>
                  thereunder (including Regulation S-X). Since the date of the
                  filing of the Annual Report with the Commission, the Company
                  has made all filings with the Commission required to be made
                  by the Company under the Exchange Act.

            (d)   The Company and each of its subsidiaries (as defined in
                  Section 15) have been duly incorporated (or, with respect to
                  subsidiaries that are not corporations, duly organized) are
                  validly existing as corporations in good standing under the
                  laws of their respective jurisdictions of incorporation (or
                  organization, as applicable), are duly qualified to do
                  business and are in good standing as foreign corporations (or
                  other foreign entities, as applicable) in each jurisdiction in
                  which their respective ownership or lease of property or the
                  conduct of their respective businesses requires such
                  qualification, and have all power and authority necessary to
                  own or hold their respective properties and to conduct the
                  businesses in which they are engaged, except where the failure
                  to so qualify or have such power or authority would not
                  reasonably be expected to have, singularly or in the
                  aggregate, a material adverse effect on the properties,
                  business, results of operations, condition (financial or
                  otherwise), or shareholders' equity of the Company and its
                  subsidiaries, individually or taken as a whole (a "Material
                  Adverse Effect").

                  Each of the Company and its subsidiaries has all necessary
                  material consents, approvals, authorizations, orders,
                  registrations, qualifications, licenses, filings and permits
                  of, with and from all judicial, regulatory and other legal or
                  governmental agencies, bodies or administrative agencies, and
                  all third parties, foreign and domestic (collectively, the
                  "Consents"), to own, lease and operate its properties and
                  conduct its business as it is now being conducted and as
                  disclosed in the Memorandum and, to the Company's knowledge,
                  each such Consent is valid and in full force and effect, and
                  neither the Company nor any of its subsidiaries has received
                  notice of any investigation or proceedings which results in
                  or, if decided adversely to the Company or any of its
                  subsidiaries, could reasonably be expected to result in, the
                  revocation of, or imposition of a materially burdensome
                  restriction on, any Consent. Each of the Company and the
                  Subsidiaries is in compliance with all applicable laws, rules,
                  regulations, ordinances, directives, judgments, decrees and
                  orders, foreign and domestic, except where failure to be in
                  compliance could not reasonably be expected to have a Material
                  Adverse Effect.

            (e)   This Agreement has been duly authorized, executed and
                  delivered by the Company and the Issuer.

            (f)   All outstanding share capital of the Company has been duly
                  authorized and validly issued and is fully paid,
                  non-assessable and free of any preemptive or similar rights
                  and will conform to any description thereof contained in the
                  Memorandum.

            (g)   When the Common Shares issuable upon conversion of the Notes
                  are issued in accordance with the terms of the Notes, such
                  Common Shares will be duly authorized and validly issued and
                  will be fully paid, non-assessable and free of any preemptive
                  or similar rights.

            (h)   The Common Shares issuable upon conversion of the Notes will
                  be duly reserved on or before the Closing Date by the Company
                  for issuance.

            (i)   All the outstanding shares or other equity interests of each
                  subsidiary of the Company have been duly authorized and
                  validly issued, are fully paid and non-assessable and are
                  owned by the Company directly or indirectly through one or
                  more wholly-owned subsidiaries, free and clear of any claim,
                  lien, encumbrance, security interest, restriction upon voting
                  or transfer or any other claim of any third party (except for
                  pledges of shares

                                       3
<PAGE>
                  or other equity interests of certain subsidiaries pursuant to
                  the Amended and Restated Credit, Security, Guaranty and Pledge
                  Agreement by and among the Company, the subsidiaries referred
                  to therein, and the lenders referred to therein, dated as of
                  December 15, 2003, as amended to date) (the "Credit
                  Agreement").

            (j)   Prior to the Closing Date, the Indenture will have been duly
                  authorized by the Company and the Issuer and, on the Closing
                  Date, will have been validly executed and delivered by the
                  Company and the Issuer. When the Indenture has been duly
                  executed and delivered by the Company and the Issuer, the
                  Indenture will be the valid and binding agreement of the
                  Company and the Issuer enforceable against the Company and the
                  Issuer in accordance with their respective terms except as (i)
                  the enforceability thereof may be limited by bankruptcy,
                  insolvency or similar laws affecting creditors' rights
                  generally and (ii) rights of acceleration and the availability
                  of equitable remedies may be limited by equitable principles
                  of general applicability. Prior to the Closing Date, the
                  Contribution Agreement by and between the Company and the
                  Issuer whereby the Company agrees to contribute the Common
                  Shares to the Issuer upon conversion of the Notes by any or
                  all of the holders thereof (the "Contribution Agreement")
                  shall have been duly authorized by the Company and the Issuer
                  and validly executed and delivered by the Company and Issuer.
                  The Contribution Agreement, when executed, will be the valid
                  and binding agreement of the Company and the Issuer
                  enforceable against the Company and the Issuer in accordance
                  with its terms except as (i) the enforceability thereof may be
                  limited by bankruptcy, insolvency or similar laws affecting
                  creditors' rights generally and (ii) rights of acceleration
                  and the availability of equitable remedies may be limited by
                  equitable principles of general applicability. On the Closing
                  Date, the Indenture will conform in all material respects to
                  the requirements of the Trust Indenture Act, and the rules and
                  regulations of the Commission applicable to an indenture which
                  is qualified thereunder. The Registration Rights Agreement has
                  been duly and validly authorized by the Company and the Issuer
                  and (except with respect to the indemnification provisions of
                  the Registration Rights Agreement, for which no representation
                  or warranty is made) when duly executed and delivered by the
                  Company and the Issuer (assuming the due authorization,
                  execution and delivery by the Initial Purchasers), will
                  constitute a valid and legally binding obligation of the
                  Company and the Issuer, enforceable against each of them in
                  accordance with its terms except that the enforcement thereof
                  may be limited by bankruptcy, insolvency or similar laws
                  affecting creditors' rights generally.

            (k)   Prior to the Closing Date, the Notes will have been duly
                  authorized and, on the Closing Date, will have been validly
                  executed and delivered by the Issuer. When the Notes have been
                  duly and validly issued, executed and authenticated by the
                  Trustee in accordance with the provisions of the Indenture and
                  delivered to and paid for, the Notes will be entitled to the
                  benefits of the Indenture and will be valid and binding
                  obligations of the Issuer, enforceable in accordance with
                  their terms except as (i) the enforceability thereof may be
                  limited by bankruptcy, insolvency, reorganization, moratorium
                  or similar laws affecting creditors' rights generally and (ii)
                  rights of acceleration and the availability of equitable
                  remedies may be limited by equitable principles of general
                  applicability.

            (l)   Prior to the Closing Date, the Guarantee will have been duly
                  authorized and, on the Closing Date, will have been validly
                  executed and delivered by the Company. When the Guarantee has
                  been issued, executed and authenticated in accordance with the
                  provisions of the Indenture, and the Notes have been issued
                  and authenticated in accordance with the provisions of the
                  Indenture and delivered to and paid for by the Initial
                  Purchasers in accordance with the terms, the Notes will be
                  entitled to the benefits of the Guarantee and the Guarantee
                  will be valid and binding obligation of the Company,
                  enforceable in accordance with their terms except as (i) the
                  enforceability thereof may be limited by

                                       4
<PAGE>
                  bankruptcy, insolvency, reorganization, moratorium or similar
                  laws affecting creditors' rights generally and (ii) rights of
                  acceleration and the availability of equitable remedies may be
                  limited by equitable principles of general applicability.

            (m)   The execution, delivery and performance of this Agreement, the
                  Indenture, the Registration Rights Agreement and the Notes by
                  the Company and the Issuer and the consummation of the
                  transactions contemplated hereby and thereby will not (i)
                  conflict with or result in a breach or violation of any of the
                  terms or provisions of, or constitute a default under, any
                  indenture, mortgage, deed of trust, loan agreement or other
                  agreement or instrument to which the Company or the Issuer or
                  any of their respective subsidiaries is a party or by which
                  the Company or the Issuer or any of their respective
                  subsidiaries is bound or to which any of the property or
                  assets of the Company or the Issuer or any of their respective
                  subsidiaries is subject, (ii) result in any violation of the
                  provisions of the charter or by-laws (or other organizational
                  documents, as applicable) of the Company or the Issuer or any
                  of their respective subsidiaries or (iii) result in any
                  violation of any statute or any order, rule or regulation of
                  any court or governmental agency or body having jurisdiction
                  over the Company or the Issuer or any of their respective
                  subsidiaries or any of their properties or assets, other than,
                  in the case of each of clauses (i) and (iii), any such
                  conflict, breach, violation or default that would not,
                  singularly or in the aggregate, have a Material Adverse
                  Effect.

            (n)   No consent, approval, authorization or order of, or filing or
                  registration with, any court or governmental agency or body is
                  required for the execution, delivery and performance by the
                  Company or the Issuer of this Agreement, the Indenture, the
                  Registration Rights Agreement, the Notes and the consummation
                  of the transactions contemplated hereby and thereby, except
                  (1) as may be required under the Securities Act or the rules
                  and regulations thereunder in connection with the transactions
                  contemplated by the Registration Rights Agreement and (2) for
                  the qualification under the Trust Indenture Act.

            (o)   Each of Ernst & Young LLP and PricewaterhouseCoopers LLP, who
                  have expressed opinions on the audited financial statements
                  and related schedules included or incorporated by reference in
                  the Memorandum, are independent public accountants as required
                  by the Securities Act and the Exchange Act.

            (p)   The consolidated financial statements, together with the
                  related notes and schedules included or incorporated by
                  reference in the Memorandum fairly present the financial
                  position and the results of operations and changes in
                  financial position of the Company and its consolidated
                  subsidiaries and other consolidated entities at the respective
                  dates or for the respective periods therein specified. For the
                  financial statements covering periods ending on or prior to
                  March 31, 2004, such statements and related notes and
                  schedules have been prepared in accordance with Canadian
                  generally accepted accounting principles applied on a
                  consistent basis except as may be set forth in the Memorandum.
                  For the financial statements covering periods following March
                  31, 2004, such statements and related notes and schedules have
                  been prepared in accordance with United States generally
                  accepted accounting principles applied on a consistent basis
                  except as may be set forth in the Memorandum. The financial
                  statements, together with the related notes and schedules,
                  included or incorporated by reference in the Memorandum comply
                  as to form with all applicable accounting requirements of the
                  Securities Act and the Securities Act of British Columbia and
                  the rules and regulations promulgated thereunder (the "BCSA").
                  No other financial statements or supporting schedules or
                  exhibits are required by the Securities Act or the BCSA, as
                  the case may be, to be included in the Memorandum. The pro
                  forma and as adjusted financial information and statements
                  have been properly compiled and prepared in accordance with
                  the applicable requirements of the Securities

                                       5
<PAGE>
                  Act and the Exchange Act and includes all adjustments
                  necessary to present fairly in accordance with Canadian or
                  United States generally accepted accounting principles (as
                  applicable) the pro forma and as adjusted financial position
                  of the respective entity or entities presented therein at the
                  respective dates indicated and the results of operations for
                  the respective periods specified. The pro forma financial
                  statements included in the Memorandum have been prepared on a
                  basis consistent with historical financial statements of the
                  Company, except for the pro forma adjustments specified
                  therein, and (where applicable) give effect to assumptions
                  made on a reasonable basis and present fairly in all material
                  respects the historical and proposed transactions contemplated
                  by this Agreement and other Offering Documents.

            (q)   Neither the Company nor any of its subsidiaries has sustained,
                  since the date of the latest audited financial statements
                  included in the Memorandum, any material loss or interference
                  with its business from fire, explosion, flood or other
                  calamity, whether or not covered by insurance, or from any
                  labor dispute or court or governmental action, order or
                  decree, otherwise than as set forth in the Memorandum; and,
                  since such date, there has not been any change in the share
                  capital or long-term debt of the Company or any of its
                  subsidiaries or any material adverse change or, to the
                  Company's knowledge, any development involving a prospective
                  material adverse change, in or affecting the business, general
                  affairs, management, financial position, shareholders' equity
                  or results of operations of the Company and its subsidiaries
                  taken as a whole, otherwise than as set forth in the
                  Memorandum.

            (r)   Except as set forth in the Memorandum, there is no legal or
                  governmental proceeding pending to which the Company or the
                  Issuer or any of their respective subsidiaries is a party or
                  of which any property or assets of the Company or the Issuer
                  or any of their respective subsidiaries is the subject which,
                  singularly or in the aggregate, if determined adversely to the
                  Company or the Issuer or any of their respective subsidiaries,
                  would reasonably be expected to have a Material Adverse Effect
                  or would prevent or adversely affect the ability of the
                  Company or the Issuer to perform its obligations under this
                  Agreement; and to the best of the Company's and the Issuer's
                  knowledge, no such proceedings have been threatened or
                  contemplated by governmental authorities or threatened by
                  others.

            (s)   None of the Company or any of its subsidiaries (i) is in
                  violation of its charter or by-laws (or other organizational
                  documents, as applicable), (ii) is in default in any respect,
                  and no event has occurred which, with notice or lapse of time
                  or both, would constitute such a default, in the due
                  performance or observance of any term, covenant or condition
                  contained in any indenture, mortgage, deed of trust, loan
                  agreement or other agreement or instrument to which it is a
                  party or by which it is bound or to which any of its property
                  or assets is subject or (iii) is in violation in any respect
                  of any law, ordinance, governmental rule, regulation or court
                  decree to which it or its property or assets may be subject
                  except, in the case of each of clauses (ii) and (iii), any
                  violations or defaults which, singularly or in the aggregate,
                  would not have a Material Adverse Effect.

            (t)   The Company and each of its subsidiaries possess all licenses,
                  certificates, authorizations and permits issued by, and have
                  made all declarations and filings with, the appropriate state,
                  federal, provincial or foreign regulatory agencies or bodies
                  which are necessary for the ownership of their respective
                  properties or the conduct of their respective businesses as
                  described in the Memorandum or in the documents incorporated
                  by reference therein, except where any failures to possess or
                  make the same, singularly or in the aggregate, would not
                  reasonably be expected to have a Material Adverse Effect;
                  neither the Company nor the Issuer has received any
                  notification of any revocation or modification of any such

                                       6
<PAGE>
                  license, authorization or permit and neither has any reason to
                  believe that any such license, certificate, authorization or
                  permit will not be renewed; and except where such non-renewal
                  would not have a Material Adverse Effect.

            (u)   None of the Company nor the Issuer, nor any of their
                  respective subsidiaries is or, after giving effect to the
                  issuance and sale of the Notes and the application of the
                  proceeds thereof as described in the Memorandum, will become
                  an "investment company" within the meaning of the Investment
                  Company Act of 1940, as amended and the rules and regulations
                  of the Commission thereunder.

            (v)   Neither the Company nor, to the Company's knowledge, any of
                  its officers, directors or affiliates has taken, directly or
                  indirectly, any action designed or intended to stabilize or
                  manipulate the price of any security of the Company, or which
                  caused or resulted in, or which might in the future reasonably
                  be expected to cause or result in, stabilization or
                  manipulation of the price of any security of the Company.

            (w)   The Company and its subsidiaries own or possess the right to
                  use all patents, trademarks, trademark registrations, service
                  marks, service mark registrations, trade names, copyrights,
                  licenses, inventions, trade secrets and rights (including all
                  rights to market, sell, distribute, exhibit, commercially
                  exploit and otherwise use all material film and television
                  titles) material to the conduct of their respective
                  businesses, singularly and in the aggregate, and the Company
                  is not aware of any claim to the contrary or any challenge by
                  any other person to the rights of the Company and its
                  subsidiaries with respect to the foregoing, except any such
                  claim or challenge that would not have a Material Adverse
                  Effect. The business of the Company and its subsidiaries as
                  now conducted and as proposed to be conducted does not and
                  will not infringe or conflict with any patents, trademarks,
                  service marks, trade names, copyrights, trade secrets,
                  licenses or other intellectual property or franchise right of
                  any person, except any such claim or challenge that would not
                  have a Material Adverse Effect. No claim has been made against
                  the Company or any of its subsidiaries alleging the
                  infringement by the Company or any of its subsidiaries of any
                  patent, trademark, service mark, trade name, copyright, trade
                  secret, license in or other intellectual property right or
                  franchise right of any person, except any such claim or
                  challenge that would not have a Material Adverse Effect.

            (x)   The Company and each of its subsidiaries have good and
                  marketable title in fee simple to, or have valid rights to
                  lease or otherwise use, all items of real or personal
                  property, whether tangible or intangible, which are material
                  to the business of the Company and its subsidiaries taken as a
                  whole, in each case free and clear of all liens, encumbrances,
                  claims and defects which would reasonably be expected to have
                  a Material Adverse Effect.

            (y)   No labor disturbance by the employees of the Company or any of
                  its subsidiaries exists or, to the best of the Company's
                  knowledge, is imminent which would reasonably be expected to
                  have a Material Adverse Effect. The Company is not aware that
                  any key employee of the Company plans to terminate employment
                  with the Company.

            (z)   No "prohibited transaction" (as defined in Section 406 of the
                  Employee Retirement Income Security Act of 1974, as amended,
                  including the regulations and published interpretations
                  thereunder ("ERISA"), or Section 4975 of the Internal Revenue
                  Code of 1986, as amended from time to time (the "Code")) or
                  "accumulated funding deficiency" (as defined in Section 302 of
                  ERISA) or any of the events set forth in Section 4043(b) of
                  ERISA (other than events with respect to which the 30-day
                  notice requirement under Section 4043 of ERISA has been
                  waived) has occurred with respect to any employee benefit plan
                  which would reasonably be expected to have a Material Adverse
                  Effect; each

                                       7
<PAGE>
                  employee benefit plan is in compliance in all material
                  respects with applicable law, including ERISA and the Code;
                  the Company has not incurred and does not expect to incur any
                  material liability under Title IV of ERISA with respect to the
                  termination of, or withdrawal from, any "pension plan"; and
                  each "pension plan" (as defined in ERISA) for which the
                  Company would have any liability that is intended to be
                  qualified under Section 401(a) of the Code is so qualified in
                  all material respects and nothing has occurred, whether by
                  action or by failure to act, which could cause the loss of
                  such qualification.

            (aa)  There has been no storage, generation, transportation,
                  handling, treatment, disposal, discharge, emission, or other
                  release of any kind of toxic or other wastes or other
                  hazardous substances by, due to, or caused by the Company or
                  any of its subsidiaries (or, to the best of the Company's
                  knowledge, any other entity for whose acts or omissions the
                  Company or any of its subsidiaries is or may be liable) upon
                  any of the property now or previously owned or leased by the
                  Company or any of its subsidiaries, or upon any other
                  property, in violation of any statute or any ordinance, rule
                  (including rule of common law), regulation, order, judgment,
                  decree or permit or which would, under any statute or any
                  ordinance, rule (including rule of common law), regulation,
                  order, judgment, decree or permit, give rise to any liability,
                  except for any violation or liability which would not have,
                  singularly or in the aggregate with all such violations and
                  liabilities, a Material Adverse Effect; there has been no
                  disposal, discharge, emission or other release of any kind
                  onto such property or into the environment surrounding such
                  property of any toxic or other wastes or other hazardous
                  substances with respect to which the Company or any of its
                  subsidiaries have knowledge, except for any such disposal,
                  discharge, emission, or other release of any kind which would
                  not have, singularly or in the aggregate with all such
                  discharges and other releases, a Material Adverse Effect.

            (bb)  Each of the Company and each of its Significant Subsidiaries
                  (as defined in Section 15) (i) has filed all necessary
                  federal, state, provincial and foreign income and franchise
                  tax returns, (ii) has paid all federal, state, provincial,
                  local and foreign taxes due and payable for which it is
                  liable, and (iii) does not have any tax deficiency or claims
                  outstanding or assessed or, to the best of the Company's
                  knowledge, proposed against it which such deficiency or claim
                  could reasonably be expected to have a Material Adverse
                  Effect. Each of the Company's subsidiaries (A) has filed all
                  necessary federal, state, provincial and foreign income and
                  franchise tax returns, (B) has paid all federal state,
                  provincial, local and foreign taxes due and payable for which
                  it is liable, and (C) does not have any tax deficiency or
                  claims outstanding or assessed or, to the best of the
                  Company's knowledge, proposed against it which, in the case of
                  any of (A), (B) or (C), could reasonably be expected to have a
                  Material Adverse Effect. The accruals and reserves on the
                  books and records of the Company or any of its subsidiaries in
                  respect of tax liabilities for any taxable period not finally
                  determined are adequate to meet any assessments and related
                  liabilities for any such period and, since March 31, 2004, the
                  Company and its subsidiaries have not incurred any liability
                  for taxes other than in the ordinary course of business.

            (cc)  The Company and each of its subsidiaries carry, or are covered
                  by, insurance in such amounts and covering such risks as the
                  Company reasonably believes is adequate for the conduct of
                  their respective businesses and the value of their respective
                  properties and customary for companies engaged in similar
                  businesses in similar industries.

            (dd)  The Company and each of its subsidiaries maintains a system of
                  internal accounting controls sufficient to provide reasonable
                  assurances that (i) transactions are executed in accordance
                  with management's general or specific authorization; (ii)
                  transactions are recorded as necessary to permit preparation
                  of financial statements in conformity with United States
                  generally accepted accounting principles and to maintain
                  accountability for

                                       8
<PAGE>
                  assets; (iii) access to assets is permitted only in accordance
                  with management's general or specific authorization; and (iv)
                  the recorded accountability for assets is compared with
                  existing assets at reasonable intervals and appropriate action
                  is taken with respect to any differences.

            (ee)  The minute books of the Company, the Principal Canadian
                  Subsidiary, LG Pictures Inc., Film Holdings Co. and each of
                  the Principal U.S. Subsidiaries have been made available to
                  the Initial Purchasers and counsel for the Initial Purchasers,
                  and such books (i) contain a complete summary in all material
                  respects of all meetings and actions of the board of directors
                  (including each board committee) (or comparable organizational
                  body, as applicable) and shareholders (or equity holders, as
                  applicable) of the Company and each of such subsidiaries since
                  the time of its respective incorporation (or other
                  organization, as applicable) through the date of the latest
                  meeting and action, and (ii) accurately in all material
                  respects reflect all transactions referred to in such minutes.
                  For purposes of this Agreement, the "Principal U.S.
                  Subsidiaries" are Lions Gate Entertainment Inc., Lions Gate
                  Films Inc., Lions Gate Television Inc., Artisan Home
                  Entertainment Inc., Artisan Pictures Inc. and Artisan
                  Releasing Inc., and the "Principal Canadian Subsidiary" is
                  Lions Gate Television Corp.

            (ff)  There is no franchise, lease, contract, agreement or document
                  required by BCSA or the Securities Act to be described in the
                  Memorandum or the documents incorporated by reference therein
                  which is not described therein as required; and all
                  descriptions of any such franchises, leases, contracts,
                  agreements or documents contained in the Prospectus are
                  accurate and complete descriptions of such documents in all
                  material respects. No such franchise, lease, contract or
                  agreement has been suspended or terminated for convenience or
                  default by the Company or any of the other parties thereto
                  except as would not, singularly or in the aggregate, have a
                  Material Adverse Effect, and the Company has not received
                  notice and has no other knowledge of any such pending or
                  threatened suspension or termination, except for such pending
                  or threatened suspensions or terminations that would not
                  reasonably be expected to, singularly or in the aggregate,
                  have a Material Adverse Effect.

            (gg)  No relationship, direct or indirect, exists between or among
                  the Company or the Issuer on the one hand, and the directors,
                  officers, shareholders, customers or suppliers of the Company
                  or the Issuer on the other hand, which is required to be
                  described in the Memorandum and which is not so described.

            (hh)  Except as described in the Memorandum or documents
                  incorporated by reference therein, there are no outstanding
                  subscriptions, rights, warrants, calls or options to acquire,
                  or instruments convertible into or exchangeable for, or
                  agreements or understandings with respect to the sale or
                  issuance of, any shares of capital stock of or other equity or
                  other ownership interest in the Company or any of its
                  subsidiaries.

            (ii)  None of the Company or any of its subsidiaries own any "margin
                  securities" as that term is defined in Regulation U of the
                  Board of Governors of the Federal Reserve System (the "Federal
                  Reserve Board"), and none of the proceeds of the sale of the
                  Notes will be used, directly or indirectly, for the purpose of
                  purchasing or carrying any margin security, for the purpose of
                  reducing or retiring any indebtedness which was originally
                  incurred to purchase or carry any margin security or for any
                  other purpose which might cause any of the Notes or Common
                  Shares to be considered a "purpose credit" within the meanings
                  of Regulation T, U or X of the Federal Reserve Board.


                                       9
<PAGE>
            (jj)  None of the Company nor the Issuer nor any of their respective
                  subsidiaries is a party to any contract, agreement or
                  understanding with any person or entity that would give rise
                  to a valid claim against the Company or the Issuer or the
                  Initial Purchasers for a brokerage commission, finder's fee or
                  like payment in connection with the issuance and sale of the
                  Notes and the Guarantee.

            (kk)  No forward-looking statement (within the meaning of Section
                  27A of the Securities Act and Section 21E of the Exchange Act)
                  contained in the Memorandum has been made or reaffirmed
                  without a reasonable basis or has been disclosed other than in
                  good faith.

            (ll)  None of the Company or any of its subsidiaries does business
                  with the government of Cuba or with any person or affiliate
                  located in Cuba within the meaning of Florida Statutes Section
                  517.075.

            (mm)  To the knowledge of the Company and the Issuer, no action has
                  been taken and no law, statute, rule or regulation or order
                  has been enacted, adopted or issued by any governmental agency
                  or body which prevents the execution, delivery and performance
                  of any of this Agreement, the Indenture, the Registration
                  Rights Agreement and the Notes, the issuance of the Notes or
                  suspends the sale of the Notes in any jurisdiction referred to
                  in Section 4(i); and no injunction, restraining order,
                  decision, decree or other order or relief of any nature by a
                  federal or state court or other tribunal of competent
                  jurisdiction has been issued with respect to the Company or
                  any of its subsidiaries which would prevent or suspend the
                  issuance or sale of the Notes in any jurisdiction heretofore
                  designated pursuant to Section 4(i).

            (nn)  Neither the Company nor any of its affiliates has, directly or
                  through any agent, sold, offered for sale, solicited offers to
                  buy or otherwise negotiated in respect of, any security (as
                  such term is defined in the Securities Act), which is or will
                  be integrated with the sale of the Notes in a manner that
                  would require registration of the Notes under the Securities
                  Act.

            (oo)  When the Notes are issued and delivered pursuant to this
                  Agreement, the Notes will not be of the same class (within the
                  meaning of Rule 144A under the Securities Act) as any security
                  of the Company or the Issuer that is listed on a national
                  securities exchange registered under Section 6 of the Exchange
                  Act or that is quoted in a United States automated
                  inter-dealer quotation system.

            (pp)  No form of general solicitation or general advertising (as
                  defined in Regulation D under the Securities Act) was used by
                  the Company or the Issuer or any of its representatives in
                  connection with the offer and sale of the Notes contemplated
                  hereby, including, but not limited to, articles, notices or
                  other communications published in any newspaper, magazine, or
                  similar medium or broadcast over television or radio, or any
                  seminar or meeting whose attendees have been invited by any
                  general solicitation or general advertising. No securities of
                  the same class as the Notes have been issued and sold by the
                  Company or the Issuer within the six-month period immediately
                  prior to the date hereof. Neither the Company nor the Issuer
                  have distributed and, prior to the later to occur of (i) the
                  Closing Date and (ii) completion of the distribution of the
                  Notes, will not distribute any offering material in connection
                  with the offering and sale of the Notes other than the
                  Memorandum.

            (qq)  None of the Company nor the Issuer nor any of their respective
                  affiliates or any person acting on its or their behalf has
                  engaged or will engage in any directed selling efforts within

                                       10
<PAGE>
                  the meaning of Regulation S under the Securities Act
                  ("Regulation S") with respect to the Notes.

            (rr)  The Company and the Issuer and their respective affiliates and
                  all persons acting on their behalf have complied with and will
                  comply with the offering restrictions requirements of
                  Regulation S in connection with the sale of the Notes outside
                  the United States.

            (ss)  No registration under the Securities Act or the BCSA of the
                  Notes is required for the sale of the Notes to the Investors
                  as contemplated hereby.

            (tt)  Neither the Company nor the Issuer nor any of the Company's or
                  the Issuer's subsidiaries or affiliates (within the meaning of
                  Rule 144A under the Securities Act) has taken, directly or
                  indirectly, any action designed to, or that might reasonably
                  be expected to, cause or result in stabilization or
                  manipulation of the price of any security of the Company or
                  the Issuer or any of the Company's or the Issuer's
                  subsidiaries to facilitate the sale or resale of the Notes.

            (uu)  The Information (as defined below) and any other information
                  relating to the Company or the Issuer, will not contain any
                  untrue statement of a material fact or omit to state any
                  material fact necessary to make the statements contained
                  therein, in the light of circumstances under which they were
                  made, not misleading.

            (vv)  The Company is in compliance with all applicable requirements
                  of the New York Stock Exchange, including corporate governance
                  requirements. The Company is in compliance with all applicable
                  requirements of the Toronto Stock Exchange, including
                  corporate governance requirements. The Company is subject to
                  the reporting requirements of Section 13 or 15(d) of the
                  Exchange Act and files reports with the Commission on the
                  EDGAR System. The Company's common shares (the "Common
                  Shares") is registered pursuant to Section 12(b) of the
                  Exchange Act and the outstanding shares of Common Shares are
                  listed on the New York Stock Exchange, and the Company has
                  taken no action designed to, or likely to have the effect of,
                  terminating the registration of the Common Shares under the
                  Exchange Act or de-listing the Common Shares from the New York
                  Stock Exchange, nor has the Company received any notification
                  that the Commission or the New York Stock Exchange is
                  contemplating terminating such registration or listing.

            (ww)  The Company is in compliance in all material respects with all
                  applicable provisions of the Sarbanes-Oxley Act of 2002 and
                  all rules and regulations promulgated thereunder or
                  implementing the provisions thereof that are currently in
                  effect.

            (xx)  None of the Company, the Issuer, any Subsidiary and, to the
                  Company's and the Issuer's knowledge, any of their respective
                  employees or agents has at any time during the last five years
                  (i) made any unlawful contribution to any candidate for
                  foreign office, or failed to disclose fully any contribution
                  in violation of law, or (ii) made any payment to any federal
                  or state governmental officer or official, or other person
                  charged with similar public or quasi-public duties, other than
                  payments required or permitted by the laws of the United
                  States of any jurisdiction thereof.

            (yy)  Other than this Agreement, there are no contracts, agreements
                  or understandings between the Company or the Issuer or any of
                  their respective subsidiaries and any person that would give
                  rise to a valid claim against the Company or the Issuer or any
                  of their respective subsidiaries for a brokerage commission,
                  finder's fee or like payment in connection with the issuance,
                  purchase or sale of the Notes.


                                       11
<PAGE>
            (zz)  Each of the Company and the Issuer acknowledges that the
                  Initial Purchasers and counsel to the Initial Purchasers will
                  rely upon the accuracy and truth of the foregoing
                  representations and hereby consents to such reliance.

            (aaa) The statistical, industry-related and market-related data
                  included in the Memorandum are based on or derived from
                  sources which the Issuer and the Company reasonably and in
                  good faith believe to be reliable and accurate and such data
                  agree with the sources from which they are derived.

      3. PURCHASE, SALE AND DELIVERY OF OFFERED NOTES.

            (a)   On the basis of the representations, warranties and agreements
                  herein contained, but subject to the terms and conditions
                  herein set forth, the Company agrees to issue and sell to each
                  Initial Purchaser, and each Initial Purchaser agrees,
                  severally and not jointly, to purchase from the Company, at a
                  purchase price of 97% of the principal amount thereof, plus
                  accrued interest, if any, from October 4, 2004 to the Closing
                  Date (if the Closing Date occurs after October 4, 2004), the
                  principal amount of Notes set forth opposite the name of such
                  Initial Purchaser on Schedule A hereto. The Company shall not
                  be obligated to deliver any of the Notes except upon payment
                  for all the Notes to be purchased as provided herein.

                  Delivery of and payment for the Notes shall be made at the
                  offices of Paul, Hastings, Janofsky & Walker LLP, 75 East 55th
                  Street, New York, NY 10022, or at such other place as shall be
                  agreed upon by SG Cowen & Co., LLC ("SG Cowen") and the
                  Company, at 9:00 A.M., New York City time, on October 4, 2004,
                  or at such other date or time as shall be agreed upon by SG
                  Cowen and the Company (such date and time being referred to
                  herein as the "Closing Date").

                  The Notes to be purchased by each Initial Purchaser hereunder
                  and sold to Qualified Institutional Buyers (as defined below)
                  shall be represented by one or more global securities in
                  book-entry form which will be deposited by or on behalf of the
                  Company with The Depository Trust Company or its designated
                  custodian. Notes to be resold to Accredited Investors shall be
                  delivered in physical, certificated form to such Accredited
                  Investors (as defined below). On the Closing Date, the Company
                  shall deliver or cause to be delivered the Notes to SG Cowen
                  for the account of each Initial Purchaser against payment to
                  or upon the order of the Company of the purchase price by wire
                  transfer payable in Federal (same day) funds by causing The
                  Depository Trust Company to credit the Notes to the account of
                  SG Cowen at The Depository Trust Company. If applicable, the
                  Company shall make the certificates representing the Notes
                  available for inspection by SG Cowen at least twenty-four
                  hours prior to the Closing Date. Delivery at the time and
                  place specified pursuant to this Agreement is a further
                  condition of the obligation of each Initial Purchaser
                  hereunder.

            (b)   The Initial Purchasers have advised the Company that they
                  propose to offer the Notes for resale upon the terms and
                  subject to the conditions set forth herein and in the
                  Memorandum. Each Initial Purchaser, severally and not jointly,
                  represents and warrants to, and agrees with, the Company that
                  (i) it is purchasing the Notes pursuant to a private sale
                  exempt from registration under the Securities Act, (ii) it has
                  not solicited offers for, or offered or sold, and will not
                  solicit offers for, or offer or sell, the Notes by means of
                  any form of general solicitation or general advertising within
                  the meaning of Rule 502(c) of Regulation D under the
                  Securities Act ("Regulation D") or in any manner involving a
                  public offering within the meaning of Section 4(2) of the
                  Securities Act and (iii) it has solicited and will solicit
                  offers for the Notes only from, and has offered or sold and
                  will

                                       12
<PAGE>
                  offer, sell or deliver the Notes, as part of its initial
                  offering, only to (A) persons whom it reasonably believes to
                  be qualified institutional buyers ("Qualified Institutional
                  Buyers") as defined in Rule 144A under the Securities Act, or
                  if any such person is buying for one or more institutional
                  accounts for which such person is acting as fiduciary or
                  agent, only when such person has represented to it that each
                  such account is a Qualified Institutional Buyer to whom notice
                  has been given that such sale or delivery is being made in
                  reliance on Rule 144A and in each case, in transactions in
                  accordance with Rule 144A and (B) a limited number of other
                  accredited investors ("Accredited Investors") as defined in
                  Rule 501(a)(1), (2), (3) or (7) under Regulation D that are
                  institutional investors in private sales exempt from
                  registration under the Securities Act. Each Initial Purchaser,
                  severally and not jointly, agrees that, prior to or
                  simultaneously with the confirmation of sale by such Initial
                  Purchaser to any purchaser of any of the Notes purchased by
                  such Initial Purchaser from the Issuer pursuant hereto, such
                  Initial Purchaser shall furnish to that purchaser a copy of
                  the Memorandum (and any amendment or supplement thereto that
                  the Issuer shall have furnished to such Initial Purchaser
                  prior to the date of such confirmation of sale). In addition
                  to the foregoing, each Initial Purchaser acknowledges and
                  agrees that the Company and, for purposes of the opinions to
                  be delivered to the Initial Purchasers pursuant to Sections
                  6(c) and (d), counsel for the Company and for the Initial
                  Purchasers, respectively, may rely upon the accuracy of the
                  representations and warranties of the Initial Purchasers and
                  their compliance with their agreements contained in this
                  Section 3, and each Initial Purchaser hereby consents to such
                  reliance.

            (c)   The Company acknowledges and agrees that the Initial
                  Purchasers may sell Notes to any affiliate of an Initial
                  Purchaser and that any such affiliate may sell Notes purchased
                  by it to an Initial Purchaser.

      4. FURTHER AGREEMENTS OF THE COMPANY AND THE ISSUER. The Company and the
Issuer jointly and severally agree with each of the several Initial Purchasers:

            (a)   To advise the Initial Purchasers promptly and, if requested,
                  confirm such advice in writing, of the happening of any event
                  which makes any statement of a material fact made in the
                  Offering Memorandum untrue or which requires the making of any
                  additions to or changes in the Offering Memorandum (as amended
                  or supplemented from time to time) in order to make the
                  statements therein, in the light of the circumstances under
                  which they were made, not misleading; to advise the Initial
                  Purchasers promptly of any order preventing or suspending the
                  use of the Preliminary Offering Memorandum or the Offering
                  Memorandum, of any suspension of the qualification of the
                  Notes or related Guarantee under any state securities or Blue
                  Sky laws for offering or sale in any jurisdiction and of the
                  initiation or threatening of any proceeding for any such
                  purpose; and to use its reasonable best efforts to prevent the
                  issuance of any such order preventing or suspending the use of
                  the Preliminary Offering Memorandum or the Offering Memorandum
                  or suspending any such qualification and, if any such
                  suspension is issued, to obtain the lifting thereof at the
                  earliest possible time.

            (b)   To file promptly all reports and any definitive proxy or
                  information statements required to be filed by the Company and
                  the Issuer with the Commission pursuant to Section 13(a),
                  13(c), 14 or 15(d) of the Exchange Act subsequent to the date
                  of the Memorandum and for so long as the delivery of an
                  offering memorandum is required in connection with the
                  issuance or sale of the Notes.

            (c)   To advise the Initial Purchasers, promptly after either the
                  Company or the Issuer receives notice thereof, of the
                  suspension of the qualification of the Notes for issuance or
                  sale in any jurisdiction, of the initiation or threatening of
                  any proceeding for any such purpose, or

                                       13
<PAGE>
                  of any request by the British Columbia Securities Commission
                  (the "BCSC") or the Commission with respect to the issuance
                  and sale of the Notes.

            (d)   To furnish promptly to each of the Initial Purchasers and
                  counsel for the Initial Purchasers, without charge, as many
                  copies of the Preliminary Offering Memorandum and the Offering
                  Memorandum (and any amendments or supplements thereto) as may
                  be reasonably requested.

            (e)   Prior to making any amendment or supplement to the Offering
                  Memorandum, to furnish a copy thereof to each of the Initial
                  Purchasers and counsel for the Initial Purchasers and not to
                  effect any such amendment or supplement to which the Initial
                  Purchasers shall reasonably and promptly object by notice to
                  the Company after a reasonable period to review.

            (f)   To make generally available to the Company's shareholders as
                  soon as practicable, but in any event not later than eighteen
                  months after the date hereof, an earnings statement of the
                  Company and its subsidiaries (which need not be audited)
                  complying with Section 11(a) of the Securities Act (including,
                  at the option of the Company, Rule 158).

            (g)   If, at any time prior to completion of the resale of the Notes
                  by the Initial Purchasers, any event shall occur or condition
                  exist as a result of which it is necessary, in the opinion of
                  counsel for the Initial Purchasers or counsel for the Company,
                  to amend or supplement the Offering Memorandum in order that
                  the Offering Memorandum will not include an untrue statement
                  of a material fact or omit to state a material fact necessary
                  in order to make the statements therein, in the light of the
                  circumstances existing at the time it is delivered to a
                  purchaser, not misleading, or if it is necessary to amend or
                  supplement the Offering Memorandum to comply with applicable
                  law, to promptly prepare such amendment or supplement as may
                  be necessary to correct such untrue statement or omission or
                  so that the Offering Memorandum, as so amended or
                  supplemented, will comply with applicable law.

            (h)   For so long as the Notes are outstanding and are "restricted
                  securities" within the meaning of Rule 144(a)(3) under the
                  Securities Act, to furnish to holders of the Notes and
                  prospective purchasers of the Notes designated by such
                  holders, upon request of such holders or such prospective
                  purchasers, the information required to be delivered pursuant
                  to Rule 144A(d)(4) under the Securities Act, unless the
                  Company is then subject to and in compliance with Section 13
                  or 15(d) of the Exchange Act (the foregoing agreement being
                  for the benefit of the holders from time to time of the Notes
                  and prospective purchasers of the Notes designated by such
                  holders).

            (i)   To promptly take from time to time such actions as the Initial
                  Purchasers may reasonably request to qualify the Notes for
                  offering and sale under the securities or Blue Sky laws of
                  such jurisdictions as the Initial Purchasers may designate and
                  to continue such qualifications in effect for so long as
                  required for the distribution of the Notes; provided that the
                  Company and the Issuer shall not be obligated to qualify as
                  foreign corporations in any jurisdiction in which they are not
                  so qualified or to file a general consent to service of
                  process in any jurisdiction.

            (j)   For so long as any of the Notes remain outstanding, the
                  Company and the Issuer will furnish to the Initial Purchasers
                  upon their request (i) as soon as they are available, copies
                  of all reports and other communications (financial or
                  otherwise) furnished by the Company or the Issuer to the
                  Trustee or to the holders of the Notes, (ii) as soon as they
                  are available, copies of all reports or other communications
                  furnished to shareholders of

                                       14
<PAGE>
                  the Company and (iii) as soon as they are available, copies of
                  any reports and financial statements furnished or filed with
                  the Commission pursuant to the Exchange Act, furnished or
                  filed in Canada through the System for Electronic Document
                  Analysis and Retrieval (SEDAR), or furnished or filed with any
                  national securities exchange or automatic quotation system on
                  which the Notes may be listed or quoted.

            (k)   Without the prior written consent of SG Cowen, during the
                  period beginning from the date hereof and continuing to and
                  including ninety (90) days after the date of the Offering
                  Memorandum, the Company will not offer for sale, sell,
                  contract to sell or otherwise dispose of directly or
                  indirectly, or file a registration statement for, or announce
                  any offering of, any of the Common Shares, the Notes, or
                  securities convertible into or exercisable or exchangeable for
                  Common Shares or the Notes or any securities of the Company or
                  the Issuer that are substantially similar to the Notes (other
                  than (1) the filing of a registration statement for the resale
                  of the Common Shares issuable upon conversion of the Notes)
                  and (2) the issuance of shares pursuant to employee benefit
                  plans, qualified option plans or other employee compensation
                  plans existing on the date hereof (including the filing of a
                  registration statement on Form S-8 covering such shares) or
                  pursuant to currently outstanding options, warrants or
                  rights). The Company will cause each officer listed in Annex I
                  to furnish to the Initial Purchasers, prior to the Closing
                  Date, a letter, substantially in the form of Exhibit I hereto
                  (with such changes as may be approved by SG Cowen), pursuant
                  to which each such person shall agree not to directly or
                  indirectly offer, sell, assign, transfer, pledge, contract to
                  sell, or otherwise dispose of any Common Shares, Notes or
                  securities convertible into or exercisable or exchangeable for
                  Common Shares or the Notes for a period ending December 28,
                  2004, without the prior written consent of SG Cowen.

            (l)   To assist the Initial Purchasers in arranging for the Notes to
                  be designated Private Offerings, Resales and Trading through
                  Automated Linkages ("PORTAL") Market securities in accordance
                  with the rules and regulations adopted by the National
                  Association of Securities Dealers, Inc. ("NASD") relating to
                  trading in the PORTAL Market and for the Notes to be eligible
                  for clearance and settlement through The Depository Trust
                  Company ("DTC").

            (m)   Not to, and to cause its affiliates not to, sell, offer for
                  sale or solicit offers to buy or otherwise negotiate in
                  respect of any security (as such term is defined in the
                  Securities Act) which could be integrated with the sale of the
                  Notes in a manner which would require registration of the
                  Notes under the Securities Act.

            (n)   Not to, and to cause its affiliates not to, and not to
                  authorize or knowingly permit any person acting on their
                  behalf to, solicit any offer to buy or offer to sell the Notes
                  by means of any form of general solicitation or general
                  advertising within the meaning of Regulation D or in any
                  manner involving a public offering within the meaning of
                  Section 4(2) of the Securities Act; and not to offer, sell,
                  contract to sell or otherwise dispose of, directly or
                  indirectly, any securities under circumstances where such
                  offer, sale, contract or disposition would cause the exemption
                  afforded by Section 4(2) of the Securities Act to cease to be
                  applicable to the offering and sale of the Notes as
                  contemplated by this Agreement and the Offering Memorandum.

            (o)   During the period from the Closing Date until two years after
                  the Closing Date, without the prior written consent of the
                  Initial Purchasers, not to, and not permit any of its
                  affiliates (as defined in Rule 144 under the Securities Act)
                  to, resell any of the Notes that have been reacquired by them
                  for so long as the Notes are "restricted securities" within
                  the meaning of Rule 144(a)(3) under the Securities Act, except
                  for Notes purchased by the

                                       15
<PAGE>
                  Company or any of its subsidiaries and resold in a transaction
                  registered under the Securities Act.

            (p)   Prior to the Closing Date, to furnish to the Initial
                  Purchasers, as soon as they have been prepared and reviewed by
                  the Company's independent auditors, copies of any unaudited
                  quarterly consolidated financial statements of the Company for
                  any periods subsequent to the periods covered by the financial
                  statements appearing or incorporated by reference in the
                  Offering Memorandum.

            (q)   Prior to the Closing Date, except for routine communications
                  in the ordinary course of business and consistent with the
                  past practices of the Company, the Company and the Issuer will
                  not issue any press release or other communication directly or
                  indirectly or hold any press conference with respect to the
                  Company, the Issuer, their respective condition, financial or
                  otherwise, or earnings, business affairs or business
                  prospects, without the prior written consent of the Initial
                  Purchasers, unless in the judgment of the Company and its
                  counsel, and after notification to the Initial Purchasers,
                  such press release or communication is required by law or by
                  an applicable stock exchange.

            (r)   In connection with the offering of the Notes, until SG Cowen
                  shall have notified the Company of the completion of the
                  resale of the Notes, the Company will not, and will cause its
                  affiliated purchasers (as defined in Regulation M under the
                  Exchange Act) not to, either alone or with one or more other
                  persons, bid for or purchase, for any account in which it or
                  any of its affiliated purchasers has a beneficial interest,
                  any Notes, or attempt to induce any person to purchase any
                  Notes; and not to, and to cause its affiliated purchasers not
                  to, make bids or purchase for the purpose of creating actual,
                  or apparent, active trading in or of raising the price of the
                  Notes.

            (s)   The Company will use its reasonable best efforts to obtain
                  conditional approval prior to the Closing Date of the listing
                  on each of the New York Stock Exchange and the Toronto Stock
                  Exchange of the Common Shares issuable upon conversion of the
                  Notes in accordance with the requirements of each such
                  exchange.

            (t)   To apply the net proceeds from the sale of the Notes as set
                  forth in the Offering Memorandum under the heading "Use of
                  Proceeds".

            (u)   The Company will not, for so long as the Notes are
                  outstanding, be or become, or be or become owned by, an
                  open-end investment company, unit investment trust or
                  face-amount certificate company that is or is required to be
                  registered under Section 8 of the Investment Company Act, and
                  will not be or become, or be or become owned by, a closed-end
                  investment company required to be registered, but not
                  registered thereunder.

            (v)   In connection with the offering of the Notes, to make its
                  officers, employees, independent accountants and legal counsel
                  reasonably available upon request by SG Cowen.

            (w)   To not take any action prior to the execution and delivery of
                  the Indenture which, if taken after such execution and
                  delivery, would have violated any of the covenants contained
                  in the Indenture.

      5. PAYMENT OF EXPENSES. The Company and the Issuer agree with the Initial
Purchasers to pay (a) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Notes and any taxes payable in that connection;
(b) the costs incident to the preparation, printing and distribution of the
Preliminary Offering Memorandum, Offering Memorandum any amendments, supplements
and exhibits thereto, the costs of printing, reproducing and distributing the
other documents contemplated hereby and by

                                       16
<PAGE>
the Memorandum by mail, telex or other means of communications; (c) all expenses
incurred in connection with the application for quotation of the securities on
the PORTAL Market and the approval of the Notes for book-entry transfer by the
Depository Trust Company; (d) any applicable listing or other fees; (e) the fees
and expenses of qualifying the Notes under the securities or Blue Sky laws of
the several jurisdictions as provided in Section 4(i) and of preparing, printing
and distributing Blue Sky Memoranda and Legal Investment Surveys (including
related fees and expenses of counsel to the Initial Purchasers); (f) all fees
and expenses of the Trustee or any agent thereof; (g) any fees charged by
securities rating services for rating the Notes; (h) the transportation and
other "roadshow" expenses incurred by or on behalf of the Company
representatives in connection with presentations to and related communications
with prospective purchasers of the Notes; and (i) all other costs and expenses
incident to the performance of the obligations of the Company and the Issuer
under this Agreement (including, without limitation, the fees and expenses of
the Company's and the Issuer's counsel and the Company's and the Issuer's
independent accountants); provided that, except as otherwise provided in this
Section 5 and in Section 10, the Initial Purchasers shall pay their own costs
and expenses, including the fees and expenses of their counsel, any transfer
taxes on the Notes which they may sell and the expenses of advertising any
offering of the Notes made by the Initial Purchasers; and provided further that,
the Initial Purchasers shall pay the fees due and payable by the Company to the
Required Lenders in connection with obtaining the consent of the Required
Lenders as contemplated by Section 6(p) below.

      6. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The respective
obligations of the several Initial Purchasers hereunder are subject to
satisfaction (or waiver by SG Cowen in its sole discretion) of the following
conditions on or prior to the Closing Date:

            (a)   The Offering Memorandum (and any amendments or supplements
                  thereto) shall have been printed and copies distributed to the
                  Initial Purchasers as promptly as practicable on or following
                  the date of this Agreement or at such other date and time as
                  to which the Initial Purchasers may agree; and no stop order
                  suspending the sale of the Notes or Guarantee in any
                  jurisdiction shall have been issued and no proceeding for that
                  purpose shall have been commenced or shall be pending or
                  threatened.

            (b)   None of the Initial Purchasers shall have discovered and
                  disclosed to the Company or to the Issuer on or prior to the
                  Closing Date that the Offering Memorandum or any amendment or
                  supplement thereto contains an untrue statement of a fact
                  which, in the opinion of counsel for the Initial Purchasers,
                  is material or omits to state any fact which, in the opinion
                  of such counsel, is material and is required to be stated
                  therein or is necessary to make the statements therein not
                  misleading.

            (c)   All corporate proceedings and other legal matters incident to
                  the authorization, form and validity of the Offering
                  Memorandum and the legal matters relating to this Agreement
                  and the transactions contemplated hereby shall be reasonably
                  satisfactory in all material respects to counsel for the
                  Initial Purchasers, and the Company and the Issuer shall have
                  furnished to such counsel all documents and information that
                  they may reasonably request to enable them to pass upon such
                  matters.

            (d)   On the Closing Date, the Initial Purchasers shall have
                  received the opinion in form and substance satisfactory to the
                  Initial Purchasers and counsel to the Initial Purchasers,
                  dated as of the Closing Date and addressed to the Initial
                  Purchasers, of (i) O'Melveny & Myers LLP, United States
                  counsel for the Company and the Issuer, in the form of Annex
                  II hereto, and (ii) Heenan Blaikie LLP, Canadian counsel for
                  the Company and the Issuer, in the form of Annex III hereto.

            (e)   The Initial Purchasers shall have received from each of Ernst
                  & Young LLP and PricewaterhouseCoopers LLP comfort letters
                  dated each of the date hereof and the

                                       17
<PAGE>
                  Closing Date, in form and substance reasonably satisfactory to
                  counsel for the Initial Purchasers.

            (f)   The representations and warranties of the Company and the
                  Issuer contained in this Agreement shall be true and correct
                  on and as of the date hereof and on and as of the Closing Date
                  as if made on and as of the Closing Date; the statements of
                  the Company's and the Issuer's officers made pursuant to any
                  certificate delivered in accordance with the provisions hereof
                  shall be true and correct on and as of the date made and on
                  and as of the Closing Date; the Company and the Issuer shall
                  have performed all applicable covenants and agreements and
                  satisfied all conditions on their part to be performed or
                  satisfied hereunder at or prior to the Closing Date; and
                  subsequent to the date of the most recent financial statements
                  in such Memorandum there shall have been no event or
                  development, and no information shall have become known, that,
                  individually or in the aggregate, has or would be reasonably
                  likely to have a Material Adverse Effect.

            (g)   The sale of the Notes shall not be enjoined (temporarily or
                  permanently) on the Closing Date.

            (h)   On the Closing Date, the Initial Purchasers shall have
                  received a letter (the "bring- down letter") from each of
                  Ernst & Young LLP and PricewaterhouseCoopers LLP,
                  respectively, addressed to the Initial Purchasers and dated
                  the Closing Date confirming, as of the date of the bring-down
                  letter (or, with respect to matters involving changes or
                  developments since the respective dates as of which specified
                  financial information is given in the Offering Memorandum as
                  of a date not more than three business days prior to the date
                  of the bring-down letter), the conclusions and findings of
                  such firm with respect to the financial information and other
                  matters covered by its letter delivered to the Initial
                  Purchasers concurrently with the execution of this Agreement
                  pursuant to Section 6(e).

            (i)   The Company shall have furnished to the Initial Purchasers a
                  certificate, dated the Closing Date, of its Chairman of the
                  Board, its President or a Vice President and its chief
                  financial officer stating that (i) such officers have
                  carefully examined the Offering Memorandum and, in their
                  opinion, the Offering Memorandum, as of its date, did not
                  include any untrue statement of a material fact and did not
                  omit to state a material fact required to be stated therein or
                  necessary to make the statements therein not misleading, (ii)
                  since the date of the Offering Memorandum no event has
                  occurred which should have been set forth in a supplement or
                  amendment to the Offering Memorandum, (iii) to the best of
                  their knowledge after reasonable investigation, as of the
                  Closing Date, the representations and warranties of the
                  Company and the Issuer in this Agreement are true and correct
                  and each of the Company and the Issuer has complied with all
                  agreements and satisfied all conditions on its part to be
                  performed or satisfied hereunder at or prior to the Closing
                  Date, and (iv) subsequent to the date of the most recent
                  financial statements included in the Offering Memorandum,
                  there has been no material adverse change in the financial
                  position or results of operation of the Company and its
                  subsidiaries, or any change, or any development including a
                  prospective change, in or affecting the condition (financial
                  or otherwise), results of operations or business of the
                  Company and its subsidiaries taken as a whole, except as set
                  forth in the Offering Memorandum.

            (j)   Subsequent to the date hereof, none of the Company or any of
                  its subsidiaries shall have sustained any loss or interference
                  with respect to its business or properties from fire, flood,
                  hurricane, accident or other calamity, whether or not covered
                  by insurance, or from any strike, labor dispute, slow down or
                  work stoppage or from any legal or governmental proceeding,
                  order or decree, which loss or interference, individually or
                  in the aggregate, has or would be reasonably likely to have a
                  Material Adverse Effect.


                                       18
<PAGE>
            (k)   No action shall have been taken and no statute, rule,
                  regulation or order shall have been enacted, adopted or issued
                  by any governmental agency or body which would, as of the
                  Closing Date, prevent the issuance or sale of the Notes; and
                  no injunction, restraining order or order of any other nature
                  by any federal or state court of competent jurisdiction shall
                  have been issued as of the Closing Date which would prevent
                  the issuance or sale of the Notes.

            (l)   Subsequent to the execution and delivery of this Agreement (i)
                  no downgrading, including any negative outlook, shall have
                  occurred or been threatened to occur in the rating accorded
                  the Company's debt securities by any "nationally recognized
                  statistical rating organization," as that term is defined by
                  the Commission for purposes of Rule 436(g)(2) under the
                  Securities Act and (ii) no such organization shall have
                  publicly announced that it has under surveillance or review
                  (other than an announcement with positive implications of a
                  possible upgrading), its rating of any of the Company's debt
                  securities.

            (m)   Subsequent to the execution and delivery of this Agreement
                  there shall not have occurred any of the following: (i)
                  trading in securities generally on the New York Stock Exchange
                  or in the over-the-counter market, or trading in any
                  securities of the Company on any exchange or in the
                  over-the-counter market, shall have been suspended or minimum
                  prices shall have been established on any such exchange or
                  such market by the Commission, by such exchange or by any
                  other regulatory body or governmental authority having
                  jurisdiction, (ii) a banking moratorium shall have been
                  declared by Federal or state authorities, (iii) the United
                  States shall have become engaged in hostilities, there shall
                  have been an escalation in hostilities involving the United
                  States or there shall have been a declaration of a national
                  emergency or war by the United States or (iv) there shall have
                  occurred such a material adverse change in general economic,
                  political or financial conditions (or the effect of
                  international conditions on the financial markets in the
                  United States shall be such) as to make it, in the judgment of
                  a majority in interest of the Initial Purchasers,
                  impracticable or inadvisable to proceed with the sale or
                  delivery of the Notes on the terms and in the manner
                  contemplated in the Offering Memorandum.

            (n)   The Indenture shall have been duly executed and delivered by
                  the Company, the Issuer, and the Trustee, and the Notes and
                  the Guarantee thereof shall have been duly executed and
                  delivered by the Company and duly authenticated by the
                  Trustee.

            (o)   The Issuer, the Company and the Initial Purchasers shall have
                  entered into the Registration Rights Agreement and the Initial
                  Purchasers shall have received counterparts conformed as
                  executed, thereof, and such agreement shall be in full force
                  and effect.

            (p)   Prior to the Closing Date, the Required Lenders (as defined in
                  the Credit Agreement) shall have consented to the issuance of
                  the Notes in accordance with the terms of the Credit
                  Agreement.

            (q)   Prior to the Closing Date, the Company and the Issuer will
                  enter into the Contribution Agreement, involving the provision
                  of the Common Shares by the Company to the Issuer to satisfy
                  the conversion rights under the Notes.

            (r)   Prior to the Closing Date, the New York Stock Exchange and the
                  Toronto Stock Exchange shall have conditionally approved the
                  listing of the Common Shares in accordance with the
                  requirements of such exchange.

            (s)   The Notes shall have been approved by the NASD for trading in
                  the PORTAL Market and shall have been cleared for settlement
                  at DTC.


                                       19
<PAGE>
            (t)   All opinions, letters, evidence and certificates mentioned
                  above or elsewhere in this Agreement shall be deemed to be in
                  compliance with the provisions hereof only if they are in form
                  and substance reasonably satisfactory to counsel for the
                  Initial Purchasers.

            (u)   The Initial Purchasers shall have received an opinion, dated
                  the Closing Date, in form and substance reasonably
                  satisfactory to the Initial Purchasers, of Paul, Hastings,
                  Janofsky & Walker LLP, counsel for the Initial Purchasers,
                  relating to this Agreement and such other related matters as
                  the Initial Purchasers may require.

            (v)   The Issuer and the Company shall have furnished or caused to
                  be furnished to the Initial Purchasers such further
                  information, certificates and documents as the Initial
                  Purchasers may have reasonably requested.

            (w)   Each of the officers listed in Annex I shall have furnished to
                  the Initial Purchasers a letter, substantially in the form of
                  Exhibit I hereto (with such changes as may be approved by SG
                  Cowen), pursuant to which each such person shall have agreed
                  not to directly or indirectly offer, sell, assign, transfer,
                  pledge, contract to sell, or otherwise dispose of any Common
                  Shares, Notes or securities convertible into or exercisable or
                  exchangeable for Common Shares or the Notes for a period
                  ending December 28, 2004, without the prior written consent of
                  the Initial Purchasers and each such letter shall not have
                  been revoked, amended or modified.

      7. INDEMNIFICATION AND CONTRIBUTION.

            (a)   The Company and the Issuer, jointly and severally, shall
                  indemnify and hold harmless each Initial Purchaser, its
                  officers, employees, representatives and agents and each
                  person, if any, who controls any Initial Purchaser within the
                  meaning of Section 15 of the Securities Act or Section 20(a)
                  of the Exchange Act (collectively the "Initial Purchaser
                  Indemnified Parties" and, each an "Initial Purchaser
                  Indemnified Party") against any loss, claim, damage or
                  liability, joint or several, or any action in respect thereof,
                  to which that Initial Purchaser Indemnified Party may become
                  subject, under the Securities Act, the Exchange Act or
                  otherwise, insofar as such loss, claim, damage, liability or
                  action arises out of or is based upon (i) any untrue statement
                  or alleged untrue statement of a material fact contained in
                  (a) the Preliminary Offering Memorandum or the Offering
                  Memorandum or in any amendment or supplement thereto (in each
                  case, including the documents incorporated by reference
                  therein) or (b) any materials or information provided to
                  investors by, or with the approval of, the Company in
                  connection with the marketing of the offering of the Notes,
                  including any road show or investor presentations made to
                  investors by the Company (whether in person or electronically,
                  including Net Roadshow) (the "Roadshow Materials") or (c) any
                  application, filing or other material filed, registered,
                  distributed or otherwise furnished by the Company or with the
                  consent of the Company in connection with the securities laws
                  of any state or political subdivision thereof, (ii) the
                  omission or alleged omission to state in any Preliminary
                  Offering Memorandum or the Offering Memorandum, or in any
                  amendment or supplement thereto, or in any Blue Sky filing or
                  Roadshow Materials (in each case, including the documents
                  incorporated by reference therein) a material fact required to
                  be stated therein or necessary to make the statements therein
                  not misleading, or (iii) any violation or alleged violation of
                  the Securities Act or the Exchange Act related to the Roadshow
                  Materials and shall reimburse each Initial Purchaser
                  Indemnified Party promptly upon demand for any legal or other
                  expenses reasonably incurred by that Initial Purchaser
                  Indemnified Party in connection with investigating or
                  preparing to defend or defending against or appearing as a
                  third party witness in connection with any such loss, claim,
                  damage, liability or action as such expenses are incurred;
                  provided, however, that the Company and the Issuer shall not
                  be liable

                                       20
<PAGE>
                  in any such case to the extent that any such loss, claim,
                  damage, liability or action arises out of or is based upon (i)
                  an untrue statement or alleged untrue statement in or omission
                  or alleged omission from the Preliminary Offering Memorandum
                  or the Offering Memorandum, or any such amendment or
                  supplement, or in any Blue Sky filing or Roadshow Materials in
                  reliance upon and in conformity with written information
                  furnished to the Company by any Initial Purchaser specifically
                  for inclusion therein, which information the parties hereto
                  agree is limited to the Initial Purchasers' Information (as
                  defined in Section 18). This indemnity agreement is not
                  exclusive and will be in addition to any liability which the
                  Company and the Issuer might otherwise have and shall not
                  limit any rights or remedies which may otherwise be available
                  at law or in equity to each Initial Purchaser Indemnified
                  Party.

            (b)   Each Initial Purchaser, severally and not jointly, shall
                  indemnify and hold harmless the Company and the Issuer, their
                  respective officers, employees, representatives, agents,
                  directors and each person, if any, who controls the Company or
                  the Issuer within the meaning of the Securities Act
                  (collectively the "Company Indemnified Parties" and each a
                  "Company Indemnified Party") against any loss, claim, damage
                  or liability, joint or several, or any action in respect
                  thereof, to which the Company Indemnified Parties may become
                  subject, under the Securities Act, the Exchange Act or
                  otherwise, insofar as such loss, claim, damage, liability or
                  action arises out of or is based upon (i) any untrue statement
                  or alleged untrue statement of a material fact contained in
                  the Preliminary Offering Memorandum or the Offering Memorandum
                  or in any amendment or supplement thereto or (ii) the omission
                  or alleged omission to state therein a material fact required
                  to be stated therein or necessary to make the statements
                  therein not misleading, but in each case only to the extent
                  that the untrue statement or alleged untrue statement or
                  omission or alleged omission was made in reliance upon and in
                  conformity with written information furnished to the Company
                  by that Initial Purchaser specifically for inclusion therein,
                  and shall reimburse the Company Indemnified Parties for any
                  legal or other expenses reasonably incurred by such parties in
                  connection with investigating or preparing to defend or
                  defending against or appearing as third party witness in
                  connection with any such loss, claim, damage, liability or
                  action as such expenses are incurred; provided that the
                  parties hereto hereby agree that such written information
                  provided by the Initial Purchasers consists solely of the
                  Initial Purchasers' Information and that in no case shall the
                  Initial Purchasers be liable or responsible for any amount in
                  excess of the discounts and commissions received by the
                  Initial Purchasers. This indemnity agreement is not exclusive
                  and will be in addition to any liability which the Initial
                  Purchasers might otherwise have and shall not limit any rights
                  or remedies which may otherwise be available at law or in
                  equity to the Company Indemnified Parties.

            (c)   Promptly after receipt by an indemnified party under this
                  Section 7 of notice of any claim or the commencement of any
                  action, the indemnified party shall, if a claim in respect
                  thereof is to be made against the indemnifying party under
                  this Section 7, notify the indemnifying party in writing of
                  the claim or the commencement of that action; provided,
                  however, that the failure to notify the indemnifying party
                  shall not relieve it from any liability which it may have
                  under this Section 7 except to the extent it has been
                  materially prejudiced by such failure; and, provided, further,
                  that the failure to notify the indemnifying party shall not
                  relieve it from any liability which it may have to an
                  indemnified party otherwise than under this Section 7. If any
                  such claim or action shall be brought against an indemnified
                  party, and it shall notify the indemnifying party thereof, the
                  indemnifying party shall be entitled to participate therein
                  and, to the extent that it wishes, jointly with any other
                  similarly notified indemnifying party, to assume the defense
                  thereof with counsel reasonably satisfactory to the
                  indemnified party. After notice from the indemnifying party to
                  the indemnified party of its election to assume the defense of
                  such claim or action, the

                                       21
<PAGE>
                  indemnifying party shall not be liable to the indemnified
                  party under this Section 7 for any legal or other expenses
                  subsequently incurred by the indemnified party in connection
                  with the defense thereof other than reasonable costs of
                  investigation; provided, however, that any indemnified party
                  shall have the right to employ separate counsel in any such
                  action and to participate in the defense thereof but the fees
                  and expenses of such counsel shall be at the expense of such
                  indemnified party unless (i) the employment thereof has been
                  specifically authorized by the indemnifying party in writing,
                  (ii) such indemnified party shall have been advised by such
                  counsel that there may be one or more legal defenses available
                  to it which are different from or additional to those
                  available to the indemnifying party and in the reasonable
                  judgment of such counsel it is advisable for such indemnified
                  party to employ separate counsel or (iii) the indemnifying
                  party has failed to assume the defense of such action and
                  employ counsel reasonably satisfactory to the indemnified
                  party, in which case, if such indemnified party notifies the
                  indemnifying party in writing that it elects to employ
                  separate counsel at the expense of the indemnifying party, the
                  indemnifying party shall not have the right to assume the
                  defense of such action on behalf of such indemnified party, it
                  being understood, however, that the indemnifying party shall
                  not, in connection with any one such action or separate but
                  substantially similar or related actions in the same
                  jurisdiction arising out of the same general allegations or
                  circumstances, be liable for the reasonable fees and expenses
                  of more than one separate firm of attorneys at any time for
                  all such indemnified parties, which firm shall be designated
                  in writing by SG Cowen, if the indemnified parties under this
                  Section 7 consist of any Initial Purchaser Indemnified Party,
                  or by the Company if the indemnified parties under this
                  Section 7 consist of any Company Indemnified Parties. Each
                  indemnified party, as a condition of the indemnity agreements
                  contained in Sections 7(a) and (b), shall use all reasonable
                  efforts to cooperate with the indemnifying party in the
                  defense of any such action or claim. No indemnifying party
                  shall be liable for any settlement of any such action effected
                  without its written consent (which consent shall not be
                  unreasonably withheld), but if settled with its written
                  consent or if there be a final judgment for the plaintiff in
                  any such action, the indemnifying party agrees to indemnify
                  and hold harmless any indemnified party from and against any
                  loss or liability by reason of such settlement or judgment.

            (d)   If the indemnification provided for in this Section 7 is
                  unavailable or insufficient to hold harmless an indemnified
                  party under Section 7(a) or 7(b), then each indemnifying party
                  shall, in lieu of indemnifying such indemnified party,
                  contribute to the amount paid or payable by such indemnified
                  party as a result of such loss, claim, damage or liability, or
                  action in respect thereof, (i) in such proportion as shall be
                  appropriate to reflect the relative benefits received by the
                  Company and the Issuer on the one hand and the Initial
                  Purchasers on the other from the offering of the Notes or (ii)
                  if the allocation provided by clause (i) above is not
                  permitted by applicable law, in such proportion as is
                  appropriate to reflect not only the relative benefits referred
                  to in clause (i) above but also the relative fault of the
                  Company and the Issuer on the one hand and the Initial
                  Purchasers on the other with respect to the statements or
                  omissions which resulted in such loss, claim, damage or
                  liability, or action in respect thereof, as well as any other
                  relevant equitable considerations. The relative benefits
                  received by the Company and the Issuer on the one hand and the
                  Initial Purchasers on the other with respect to such offering
                  shall be deemed to be in the same proportion as the total net
                  proceeds from the offering of the Notes purchased under this
                  Agreement (before deducting expenses) received by the Company
                  and the Issuer bear to the total underwriting discounts and
                  commissions received by the Initial Purchasers with respect to
                  the Notes purchased under this Agreement, in each case as set
                  forth in the table on the cover page of the Offering
                  Memorandum. The relative fault shall be determined by
                  reference to, among other things, whether the untrue or
                  alleged untrue statement of a material fact or the omission or
                  alleged omission to state a material fact relates to
                  information supplied by the Issuer and the Company on the one
                  hand or the

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<PAGE>
                  Initial Purchasers on the other, the intent of the parties and
                  their relative knowledge, access to information and
                  opportunity to correct or prevent such untrue statement or
                  omission; provided that the parties hereto agree that the
                  written information furnished to the Company through by the
                  Initial Purchasers for use in any Preliminary Offering
                  Memorandum or the Offering Memorandum consists solely of the
                  Initial Purchasers' Information. The Company, the Issuer and
                  the Initial Purchasers agree that it would not be just and
                  equitable if contributions pursuant to this Section 7(d) were
                  to be determined by pro rata allocation (even if the Initial
                  Purchasers were treated as one entity for such purpose) or by
                  any other method of allocation which does not take into
                  account the equitable considerations referred to herein. The
                  amount paid or payable by an indemnified party as a result of
                  the loss, claim, damage or liability, or action in respect
                  thereof, referred to above in this Section 7(d) shall be
                  deemed to include, for purposes of this Section 7(d), any
                  legal or other expenses reasonably incurred by such
                  indemnified party in connection with investigating or
                  defending any such action or claim. Notwithstanding the
                  provisions of this Section 7(d), no Initial Purchaser shall be
                  required to contribute any amount in excess of the amount by
                  which the total price at which the Notes underwritten by it
                  and distributed to the public were offered to the public less
                  the amount of any damages which such Initial Purchaser has
                  otherwise paid or become liable to pay by reason of any untrue
                  or alleged untrue statement or omission or alleged omission.
                  No person guilty of fraudulent misrepresentation (within the
                  meaning of Section 11(f) of the Securities Act) shall be
                  entitled to contribution from any person who was not guilty of
                  such fraudulent misrepresentation.

            (e)   The Initial Purchasers' obligations to contribute as provided
                  in this Section 7 are several in proportion to their
                  respective underwriting obligations and not joint.

      8. OPTION NOTES. The Initial Purchasers may purchase all or less than all
of that number of Notes (rounded up or down, as determined by the Initial
Purchasers in their discretion, in order to avoid fractions) equal to
$25,000,000 aggregate principal amount (the "Option Notes"). The purchase price
to be paid for the Option Notes shall be the same price as the Notes purchased
on the Closing Date. Each of the Company and the Issuer agrees that the Issuer
shall sell to the Initial Purchasers the number of Option Notes specified in the
written notice by SG Cowen. The option granted hereby may be exercised as to all
or any part of the Option Notes not more than thirty (30) days subsequent to the
date of this Agreement. No Option Notes shall be sold and delivered unless the
Notes have been, or simultaneously are, sold and delivered. The right to place
the Option Notes or any portion thereof may be surrendered and terminated at any
time upon notice by SG Cowen to the Issuer.

      The option granted hereby may be exercised by written notice being given
to the Issuer by SG Cowen setting forth the number of Optional Shares to be
purchased by the Initial Purchasers and the date and time for delivery of and
payment for the Optional Shares. Each date and time for delivery of and payment
for the Optional Shares (which may be the First Closing Date, but not earlier)
is herein called the "Option Closing Date" and shall in no event be earlier than
two (2) business days nor later than five (5) business days after written notice
is given. (The Option Closing Date and the First Closing Date are herein called
the "Closing Dates".) The Option Closing Date and the location of delivery of,
and the form of payment for, the Optional Shares may be varied by agreement
between the Company and SG Cowen.

      9. TERMINATION.

            (a)   The Initial Purchasers may terminate this Agreement by giving
                  written notice to the Company at any time on or prior to the
                  Closing Date in the event that the Company shall have failed,
                  refused or been unable to perform all obligations and satisfy
                  all conditions on its part to be performed or satisfied
                  hereunder at or prior thereto or, if at or prior to the
                  Closing Date:


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