Catalyst withdraws lawsuit against IMAX in New York

Catalyst withdraws lawsuit against IMAX in New York

TORONTO, Oct. 11 /PRNewswire-FirstCall/ -- IMAX Corporation (NASDAQ:IMAX; TSX:IMX) today reported that Catalyst Fund Limited Partnership II ("Catalyst") has withdrawn the lawsuit it filed against IMAX in the New York State Supreme Court. Catalyst was seeking to invalidate the consents the Company successfully received from a majority of its bondholders on April 16, 2007 extending the deadline to file the Company's annual and other reports and waiving any existing defaults arising from a failure to comply with the reporting covenant under the indenture governing the Company's senior notes.

IMAX viewed the suit as entirely without merit and immediately moved to dismiss the complaint when it was filed on May 10, 2007. Catalyst then asked the Court for permission to withdraw the suit, which was granted on October 9, 2007. In September, Catalyst filed an application with the Superior Court for the Province of Ontario to litigate substantially the same matter in Canada. IMAX is contesting that application as well, and similarly views it to be without merit.

Catalyst unsuccessfully opposed the Company's consent solicitation and unsuccessfully attempted to trigger an event of default under the Company's senior notes indenture on numerous occasions. Most recently, Catalyst issued a purported notice of default dated October 10, 2007. The Company believes it is in compliance with the senior notes indenture and that Catalyst's claims are without merit.

About IMAX Corporation

IMAX Corporation is one of the world's leading entertainment technology companies, specializing in digital and film-based motion picture technologies. The worldwide IMAX network is among the most important and successful theatrical distribution platforms for major event Hollywood films around the globe, with IMAX(R) theatres delivering the world's best cinematic presentations using proprietary IMAX, IMAX(R) 3D, and IMAX DMR(R) technology. IMAX DMR is the Company's groundbreaking digital remastering technology that allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality of The IMAX Experience(R). IMAX's renowned projectors display crystal-clear images on the world's biggest screens, and the IMAX brand is recognized throughout the world for extraordinary and immersive entertainment experiences for consumers. As of June 30, 2007, there were 290 IMAX theatres operating in 40 countries.

   IMAX(R), IMAX(R) 3D, IMAX DMR-, IMAX MPX-, and The IMAX Experience(R) are   trademarks of IMAX Corporation. More information on the Company can be   found at www.imax.com.   

This press release contains forward looking statements that are based on management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include ongoing discussions with the SEC and OSC relating to their ongoing inquiries and the Company's financial reporting and accounting, the timing of theatre system deliveries, the mix of theatre systems shipped, the timing of the recognition of revenues and expenses on film production and distribution agreements, the performance of films, the viability of new businesses and products, risks arising from potential material weaknesses in internal control over financial reporting and fluctuations in foreign currency and in the large format and general commercial exhibition market. These factors and other risks and uncertainties are discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2006, as well as the Company's Quarterly Reports on Form 10-Q.

Source: IMAX Corporation

CONTACT: Media: IMAX Corporation, New York, Sarah Gormley, (212)
821-0155, sgormley@imax.com; Entertainment Media: Newman & Company, Los
Angeles, Al Newman, (310) 278-1560, asn@newman-co.com; Investors: Integrated
Corporate Relations, Amanda Mullin, (203) 682-8243; Business Media: Sloane &
Company, New York, Whit Clay, (212) 446-1864, wclay@sloanepr.com

---

Profile: International Entertainment