Catalyst Given Go Ahead to Proceed with Action against IMAX in Canada

    Catalyst Disputes Statements in IMAX's October 11, 2007 Press Release

    TORONTO, October 12 /CNW/ - Catalyst Fund Limited Partnership II, a
significant holder of 9.625% Senior Notes Due 2010 issued by IMAX Corporation
(the "Senior Notes"), has prevailed in its effort to proceed with an
application that it has filed with a Canadian court seeking mainly to redress
IMAX's continuing misrepresentations, inaccurate financial reporting, and its
defaults under the indenture that governs the Senior Notes. Contrary to the
inference contained in IMAX's press release dated October 11, 2007, Catalyst
did not discontinue the prior action that it had commenced in New York because
it was giving up its challenge to IMAX's conduct. Rather, Catalyst
discontinued the New York action because it is able to pursue additional
remedies in Canada that are not available in New York, including the
appointment of an inspector to oversee IMAX.

    Seeking to avoid those stronger remedies, IMAX opposed Catalyst's motion
to discontinue the New York action without prejudice, arguing that the New
York action lacked merit and should be dismissed with prejudice. The New York
court rejected IMAX's argument, thus allowing Catalyst to discontinue that
action without prejudice and to proceed with its application against IMAX in
Canada. The New York court also indicated that, if Catalyst opted to proceed
in New York instead of Canada, the Court could expedite discovery with respect
to Catalyst's claims and would seek to provide the same relief available in
Canada, a suggestion that Catalyst is considering. In response to the New York
court's ruling, IMAX is dropping its request for a stay of the Canadian
application. Thus, Catalyst's application in Canada will proceed, including
Catalyst's challenge to a consent solicitation that IMAX conducted in April
seeking a waiver of its defaults under the indenture that governs the Senior

    In its Canadian application, as well as in the New York action, Catalyst
has challenged the reliability of IMAX's financial reporting. In the face of
Catalyst's actions, IMAX announced on October 5, 2007, that it would again be
restating its past financial reports, which it had just purported to restate
in July. At the time of the July restatement, as well as during its September
2007 Annual Shareholders Meeting and in several other public releases, IMAX
alleged that its restatement process had been completed. Those representations
have now proven to be false, given that IMAX has once again confirmed that its
financial reports should not be relied upon. In response to IMAX's October 5,
2007 press release, Catalyst caused two new notices of default to be issued
under the indenture that governs the Senior Notes. These new notices of
default, which are in addition to the notices of default previously sent to
IMAX, relate to IMAX's failure to file its quarterly report for the second
quarter of 2007 and its failure to file annual and quarterly reports and
officers certificates dating back to 2002. These additional defaults are
clearly outside the alleged waivers that IMAX claims to have obtained by
virtue of the April consent solicitation that Catalyst is challenging.

    Although IMAX claims that it is in compliance with the indenture that
governs the Senior Notes, that position is clearly inconsistent with the
company's repeated and recognized failures to file valid financial reports and
officers certificates, which constitute events of default under that

For further information:

For further information: Catalyst Fund Limited Partnership II Gabriel de
Alba, 416-945-3020

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