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

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

TORONTO -- 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 Notes.

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 indenture.