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Via GCKey

April 17th, 2013

Mr. John Traversy Secretary General Canadian - and Telecommunications Commission , K1A 0N2

Dear Mr. Traversy:

Re: Applications for authority to effect a transfer of ownership and control of the Category A specialty service programming undertaking known an “

This is an application filed by 8324441 Inc., a wholly owned subsidiary of Inc. (Corus) on behalf of Inc. (Bell) for the authority to implement a change in the ownership and effective control of the Category A specialty service programming undertaking known as “TELETOON” (TELETOON Canada Inc.) through the acquisition of all outstanding shares of TELETOON held by Inc.

Corus has filed via GCKey the following documents:

1. Application for authority to effect a change in ownership or control of a licensed undertaking (Shares) - Form 139; 2. Appendix 1 – Supplementary Brief; 3. Appendix 2B – Control Statement; 4. Appendix 2C – Corporate Documents; 5. Appendix 2D – Purchase and Sale Agreement – Confidential and Abridged versions; and 6. Appendix 5 – Financial Statements – Confidential and Abridged versions.

The present application flows from a series of agreements between Corus and BCE Inc. (Bell) and Astral Media Inc. (Astral) to acquire either through shares or assets a variety of licensed programming undertakings. These binding agreements between the parties and each company as publicly traded companies (Corus, Bell and Astral) were made known to the public on March 4th, 2013, the date upon which these agreements were signed.

TELETOON Canada Inc. is the licensee of the following services: TELETOON (English and French-language Category A specialty programming undertaking), The (Canada), English and TELETOON Retro French (Category B specialty programming services). Corus through its wholly owned subsidiaries (YTV Canada Inc. and Limited) already holds 50% of the voting shares in TELETOON Canada Inc. Astral, through its wholly owned subsidiary The Family Channel Inc. holds the other 50% of the voting shares in TELETOON Canada Inc.

All of the licensed specialty programming undertakings held by TELETOON Canada Inc. are controlled by its and are operated on a stand-alone basis. Accordingly, neither Corus nor Astral Media Inc. exercise control over the subject broadcasting undertakings.

As the owner of 50% of the voting shares of TELETOON Canada Inc., Corus has a pre- emptive right to the 50% of voting shares owned by Astral.

The agreements that are the subject of this application are subject to two important conditions (among others):

1. The transaction between Bell and Astral that are the subject of this application are conditional upon the approval of the transfer applications that will be heard at an upcoming Commission public hearing on May 6th, 2013 (see Broadcasting Notice of Consultation CRTC 2013 106, Items 1-3) are approved; and

2. Once the above applications are approved, that Bell and Astral move to close the transaction.

In addition, Corus has requested in its Supplementary Brief filed in support of this application that the timing of the Commission’s review and processing of this matter be completed in order to allow Corus to effect either a simultaneous closing or a closing very shortly after the larger transaction between Bell and Astral. The reasons for this concurrent and expedited treatment have been laid out in Corus’ Supplementary Brief.

Pursuant to sections 31 and 32 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the “Rules”), we are hereby designating the financial information in Appendix 5 as well as Schedule 3.3(a) and Schedule 4.8(a) of the Agreement in Appendix 2D as confidential. The sections that have been redacted contain competitively sensitive information whether for the current year or future years that could detrimentally impact Corus if released. This information has been disaggregated for the purposes of this report in a manner that it would not be for other filings, whether to the Commission or for securities purposes. Corus would be pleased to respond to any questions and would ask that they be directed to the undersigned.

Thank you for your attention to this matter.

Sincerely,

Sylvie Courtemanche Vice President, Government Relations Corus Entertainment Inc.

Attachments

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Application for authority to effect a change in ownership or control of a licensed broadcasting undertaking (Shares) - Form 139

General instructions

Filing File electronically via My CRTC Account by attaching the application to the Cover page. My CRTC Account allows you to securely submit documents to the Commission with a user ID and password. Therefore, a signature is not required when using My CRTC Account. Applicants who file their application in this manner are not required to submit a hard copy of the application and its related documents. Applicants who cannot send their application electronically with My CRTC Account can contact the Commission at 1-877-249-CRTC (2782).

Instructions The following questionnaire is in HTML format and may be downloaded to the word processing of your choice. This enables you to complete the downloaded questionnaire by inserting your response in bold letters immediately following the question. You may add lines to the tables if necessary but do not alter or delete any text from the questionnaire. The application must be divided into sections as set out in the questionnaire, and include the numbered questions followed by the corresponding response. Responses must be provided, at a minimum, in a size 10 font.

Naming conventions for the electronic documents The following documents should be submitted as separate electronic documents using the naming convention specified below. The document number (Doc#) indicates the ascending order in which the documents should appear on the public file.

Table 1 - Naming convention for the electronic documents Document Electronic file name The Covering Letter (if any) APP - Doc1 - Cover Letter The Application Form APP - Doc2 - Application form Appendix 1 APP - Doc3 - Appendix 1 - Supplementary brief Appendix 2A APP - Doc4 - Appendix 2A - Ownership Information APP - Doc5 - Appendix 2B - Control Statement and Appendix 2B Agreements (or draft) Appendix 2C APP - Doc6 - Appendix 2C - Corporate Documents (or draft) APP - Doc7 - Appendix 2D - Purchase and Sale Agreement Appendix 2D (or draft) Appendix 3 APP - Doc8 - Appendix 3 - Consolidation & Cross-Media Appendix 5 APP - Doc9 - Appendix 5 - Financial Statements NOT WEB - APP - Doc xx - Confdoc - "brief description of the Each confidential document document" Each abridged version of each APP - Doc - ABRIDGED VERSION - "same description of confidential document document for which confidentiality is requested"

The Commission may return the application if it has not been duly completed or if the required technical documentation has not been filed with the Departement of Industry. The onus will be on the applicant to submit a clear application that provides all of the relevant information, identifies all regulatory issues raised in the application and provides supporting documentation.

Canadian Radio-television and Telecommunications Commission

Application for authority to effect a change in ownership or control of a licensed broadcasting undertaking (Shares)

1. General information Location of undertaking: , Ontario (for various locations, elaborate under section 4) Type of transaction: Shares ( X ) Shares and control ( ) Type of undertaking (such as AM, FM, TV, Distribution, VOD, etc.): Category A specialty programming undertaking providing both English-language and French-language feeds.

1.1 Provide a brief description of your application: Application by 8324441 Canada Inc., a wholly owned subsidiary of Corus Entertainment Inc. (Corus) on behalf of Bell Media Inc. (Bell) and its trustee, for the authority to implement a change in the ownership and effective control of the Category A specialty service programming undertaking known an “TELETOON” (TELETOON Canada Inc.) through the acquisition of all outstanding shares of TELETOON held by Astral Media Inc. Currently, 50% of all issued and outstanding shares of TELETOON ultimately held by Astral Broadcasting Inc. through its wholly owned subsidiary The Family Channel Inc. The existing structure of the ownership is depicted in CRTC Ownership Chart #159. This structure has evolved to its current state as minority shareholders sold their shares. The current structure has Corus and Astral each owning 50% of the equity in the TELETOON Company but through five entities. The process of transferring their shares is described in detail in the Supplementary Brief (Appendix 1). The result will be such that Corus moves from a 50% to a 100% position. TELETOON Canada Inc. is also the licensee of three Category B specialty-programming undertakings known as TELETOON Retro English, TELETOON Retro French and Cartoon Network. 1.2 List all the documents you request be treated as confidential: Appendix 2D – Purchase and Sale Agreement Schedule 3.3(a) and Schedule 4.8(a) Appendix 5 – Financial Statements

1.3 Identification of the licensee subject to the transaction (herein after the applicant) Name: Bell Media Inc. Address: 299 Queen Street West, Toronto, Ontario M5V 2Z5 Fax: (416) 384-4580 E-mail: [email protected]

Contact person representing the applicant (if there is no appointed agent under question 1.4) Name: Kevin Goldstein Title: Vice President, Regulatory Affairs Telephone: (416) 384-5155 Please indicate the E-Mail address and FAX number that should be specified in a Notice of Consultation. Fax: (416) 479-7015 E-mail: [email protected]

1.4 Appointment of agent I, Kevin Goldstein, the applicant, hereby appoint Sylvie Courtemanche as my agent for and on my behalf and in my name to sign, file and complete (if necessary) an application with the Canadian Radio-television and Telecommunications Commission and to sign and file a reply with respect thereto and I do hereby ratify, confirm, and adopt as my own act, such application and all replies made thereto. Date: April 17, 2013 At: Toronto, Ontario

Signature: Address of agent: , 25 Dockside Drive, Toronto, Ontario M5A 0B5 Title: Vice President, Government Relations Telephone: (613) 692-3177 Fax: (416) 479-7015 E-mail: [email protected]

1.5 Identification of the purchaser of shares Individual ( ) Company to be incorporated ( ) Company ( X) Other ( ) Specify: ______Name: 8324441 Canada Inc. Address: Corus Quay, 25 Dockside Drive, Toronto, Ontario M5A 0B5 Fax: (416) 479-7015 E-mail: [email protected] 1.6 Declaration of the applicant or its appointed agent I, Sylvie Courtemanche solemnly declare that: a. I am the appointed agent of the applicant named in this Application Brief and as such have knowledge of all matters declared therein. b. The statements made in this application, or any document filed pursuant to any request for further information by the Commission, are (will be) to the best of my knowledge and belief true in all respects. c. The opinions and estimates given in this application, or any document filed pursuant to any request for further information by the Commission, are (will be) based on facts as known to me. d. I have examined the provisions of the Broadcasting Act and the broadcasting regulations relevant to this application. And I have signed

Signature: Date: April 17, 2013 Witnessed by

Signature: Name (Printed): Gary Maavara Date: April 17, 2013 At: Toronto, Ontario

1.7 Location(s) where the application may be examined Set out the applicant’s website address or, if the application is not posted on their website, the email address where an electronic copy of the application may be requested: Website: www.corusent.com Email:

1.8 Same terms and conditions The applicant confirms that the undertaking (s) involved in the proposed transaction will continue to be operated by the licensee under the same terms and conditions as those in effect under the current licence(s) ( ) No ( X ) On September 13th, 2012, TELETOON, TELETOON Retro English and TELETOON Retro French applied to have these three (3) broadcasting licences renewed for a full licence term of seven (7) years. YTV Canada Inc. seeks to have these licences renewed under the terms and conditions proposed in the licence renewal applications filed in September 2012 (see Application No. 2012-1162-2; 2012-1163-0; and, 2012-1164-8). The Applicant requests that the Commission rely on the documents filed by TELETOON in relation to the requested changes to the terms and conditions of the subject licences. (if an amendment is proposed, the applicant must complete a separate application brief.) Date: April 17, 2013 At: Toronto, Ontario

Signature of Applicant/Licensee or its appointed agent:

1.9 It is mandatory that you file a Supplementary Brief identified as Appendix 1, ensuring that you provide the following: See Appendix 1 - Supplementary Brief.  The rationale for the transaction, from the perspective of both, the vendor(s) and the purchaser(s);  The value of the transaction, including the method(s) used to assess this value;  The proposed tangible benefits pursuant to the Commercial Radio Policy 2006 (Broadcasting Public Notice CRTC 2006-158) , and/or the Campus and policy (Broadcasting Regulatory Policy CRTC 2010-499) , and/or the television policy, A policy framework for Canadian Television (Public Notice CRTC 1999-97);  The proposed intangible benefits;  The ownership issues (for example, concentration of ownership, cross-media ownership, sale of broadcasting undertaking(s) within the first licence term, common ownership policy).

1.10 Procedural request The Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure allow an interested person to request that the Commission exercise a power under the Rules of Procedure or change the Rules of Procedure for a specific proceeding (sections 5 and 7). This is generally called a procedural request. You may consult the Implementation of new Rules of Practice and Procedure, Broadcasting and Telecom Regulatory Policy CRTC 2010-958, 23 December 2010, and the Guidelines on the CRTC Rules of Practice and Procedure, Broadcasting and Telecom Information Bulletin CRTC 2010-959, 23 December 2010, for more information. Is the applicant requesting that the Commission make an exception to its Rules of Procedure in the treatment of this application? Yes ( ) No ( X ) If yes, please indicate which section of the Rules of Procedure you wish to vary, and provide a detailed rationale as to why this request should be granted :

2. Ownership

Ownership information

Appendix 2A : All applicants must complete section a) of the appendix but MAY BE exempt from completing section b).

a. The Applicant The licensee seeking authority to effect a change in ownership or control of its licensed broadcasting undertaking(s). YTV Canada Inc. and Nelvana Limited (which are wholly owned subsidiaries of Corus Entertainment Inc.) currently hold 50% of the voting shares of TELETOON Canada Inc. which is the licensee of TELETOON, the Cartoon Network, TELETOON Retro English and TELETOON Retro French. YTV Canada Inc. is also the licensee of two other English-language Category A specialty programming undertakings (YTV and TreeHouse TV). Corus Entertainment Inc. owns and operates 10 English-language specialty services, 2 English- language pay services, 3 over-the-air television stations and 37 commercial radio stations. All of the corporate information regarding the Applicant and Corus Entertainment Inc. is already on file at the Commission. Corus Entertainment Inc. filed its annual ownership updates on February 15th, 2015 (see Rapids # 562859).

b. The Shareholder Corporations (after the transaction) The parent corporation, the corporations which form part of the control chain, and all corporations or legal entities listed in a table 2.2, holding directly or indirectly 10% or more of the voting interest of the corporation to which the table 2.2 pertains. You may be exempt from completing section b) if all ownership information for each of the entities that form part of the ownership chain after the transaction has been supplied within the last 12 months from the date of this application and accepted as satisfactory by the Commission. You must also ensure that : o no changes have occurred since the last filing that would be subject to a notification requirement or prior approval by the Commission pursuant to the Regulations; o no amalgamation has occurred; and o the exemption statement in section a) of Appendix 2A has been completed. Corus Entertainment Inc. filed its annual ownership updates on February 15th, 2015 (see Rapids # 562859).

Control statement and agreements Append as Appendix 2B: A statement regarding who controls/will control the licensee and by what means. If the control is held by a shareholder corporation, also advise who controls/will control it and by what means. If applicable, attach all related documents, such as Shareholders Agreement, Voting Trust Agreement, Local Management Agreement, Management Agreement, etc. Provide a draft document if an executed copy is not yet available.

Corporate documents Append as Appendix 2C, a copy of all constituting documents (for example, Certificate and articles of Incorporation, Amendment or Amalgamation, By-Laws, Partnership Agreement, etc.), that are not already on file with the Commission: For the applicant; if not yet incorporated, provide draft documents For the parent corporation and for each corporation or other legal entity listed in a table 2.2 of an Appendix 2A, holding directly or indirectly 20% or more of the voting interest of the corporation to which the table 2.2 pertains. If not yet incorporated, provide draft documents. Appendix 2D Append as Appendix 2D, a copy of the Purchase and Sale Agreement. Provide a draft document if the executed copy is not yet available.

3. Industry consolidation and cross-media ownership

3.1 Has the information in 3.2 been submitted to the Commission within the last 12 months: Yes ( ) No ( X ) If yes, provide reference to the application containing this information: Application No.: ______Date filed:______If yes, proceed to section 4. If no, complete question 3.2.

3.2 Complete the following table, providing a list of all entities involved in any of the areas listed below, for which any investment (equity and/or debt securities) is held after the transaction by the applicant , its directors, a corporation which directly or indirectly controls the applicant and any shareholder holding 20% or more of the voting interest of the applicant. The table may be appended as Appendix 3.

Business Classification Code a. Other CRTC licence holder and exempted undertakings Radio: Corus Premium Television Ltd.: CHED-AM, CKNG-FM, CJKR-FM, CJGV-FM, CJOB-AM, CFMI- FM, CKNW-AM, CFMJ-AM, CHML-AM, CILQ-FM, CING-FM, CKBT-FM Corus Radio Company: CFOX-FM, CHMJ-AM, CHQT-AM, CISN-FM, CKRY-FM CFHK-FM, CFLG- FM, CFNY-FM, CFPL-AM, CFPL-FM, CHAY-FM, CJSS-FM, CJXY-FM, CKDK-FM 591989 B.C. Ltd.: CFFX-FM, CFMK-FM CIMJ-FM, CIQB-FM CJDV-FM, CJOY-FM CKCB-FM, CKRU-AM, CKWF-FM CKIK-FM Limited: CFGQ-FM, CHQR-FM

Television: 591987 B.C. Ltd.: CHEX-TV, CHEX-TV-2, CKWS-TV, CKWS-TV-1, CKWS-TV-2

Specialty and Pay Services: YTV Canada Inc.: YTV and TreeHouseTV Teletoon Canada Inc.: Teletoon, Teletoon Kapow, Teletoon Retro, Teletoon Rétro Ltd.: Movie Central Ltd.: Encore Avenue Inc.: W Network 3924181 Canada Inc.: ABC Spark 7202342 Canada Inc.: Sundance Channel 7202377 Canada Inc.: W Movies Telelatino Network Inc.: Telelatino, TG24 Canada, EuroWorld Sport, Soccer Television, Mediaset Italia, TLN en Espanol, TeleNinos Canada Inc.: Food Network Canada Country Television Ltd.: CMT Cosmpolitan Television Canada Company: Cosmopolitan TV OWN Inc.: OWN 4537549 Canada Inc.:

b. Daily newspaper Not applicable c. Non-daily newspaper or other media publisher d. Production or distribution of programming material Nelvana Enterprises e. Lessor of property, plant or equipment of applicant Not applicable f. Telecommunications company regulated under the Telecommunications Act Not applicable g. Company owning securities in any of categories (a) to (f) Not applicable

Name of Name of Business Type of % Held Corporation in Vote Security Classification Securities Compared to which Securities (y/n) Holder Code Held Number Issued are Held

3.3 Respond to the following questions, taking into consideration the various ownership interests identified in question 3.2, the increased consolidation in the broadcasting industry, and the trend towards cross-media ownership: a. Provide details on the synergies expected from the multiple holdings following the transaction. Corus Entertainment Inc. through its wholly owned subsidiaries YTV Canada Inc. and Nelvana Limited currently owns 50% of the voting shares of TELETOON, the Cartoon Network, TELETOON Retro English and TELETOON Retro French. The service is currently operated by TELETOON and its board of directors. Following the approval of the transfer of ownership and control, the Applicant intends to move the balance of the operations of TELETOON to Corus Quay. Corus already provides a variety of services to the operation at that location. A full description of the proposed operational changes is provided in the Supplementary Brief. b. How will the applicant's ability to fulfill the objectives of the Broadcasting Act be affected by increased consolidation and/or cross-media ownership? See Appendix 1 - Supplementary Brief. c. How will the applicant's provision of local programming be affected by increased consolidation and/or cross-media ownership? Not applicable – this transaction involves a national specialty programming undertaking. d. What steps are being taken to ensure editorial independence between the various media interests? TELETOON, the Cartoon Network, TELETOON Retro English and TELETOON Retro French do not provide news programming therefore no issues relating to editorial independence arise.

4. Transmitters / service area

4.1 If applicable, provide a list of transmitters with their corresponding location or a list of the service area location(s).

5. Funding, benefits and financial statements

5.1 Specify the funds available to finance the proposed transaction: Equity: $0 Debt: $249M Total: $249M

5.2 a. Specify the individual sources of financing for the funds identified in question 5.1 (for example, Bank loans, share capital, other loans). If any of these persons hold public office, by election or appointment, indicate the office held under the name of the person(s). Source $ Existing cash balances and credit facilities $249M

b. Where financing is to be provided, in whole or in part, through debt securities, provide the list of proposed debt holders, including names, citizenship or jurisdiction of incorporation (or other form of constitution), designation and description of debt securities held, and the principal amount of each one.

Questions 5.3 and 5.4 do not apply to distribution undertakings

5.3 Provide the proposed benefits resulting from this transaction. Information relating to the application of the benefits test and the existing exemptions is available in Public Notices 2006- 158, 1999-97 and 1993-68. See Appendix 1 – Supplementary Brief.

5.4 Append as Appendix 5, the audited financial statements for the most recently completed fiscal year of the undertaking being acquired and, where available, any subsequent interim financial statements. If audited financial statements are not available, append non-audited financial statements for the period in question accompanied by the management attestation in the format set out in the Appendix of Circular No. 404, dated August 23, 1994. See Appendix 5 – Financial Statements.

6. Inclusion of designated groups

Employment equity Information relating to employment equity is available in Public Notices CRTC 1992-59 and 1997- 34. The Commission requires responses to questions regarding Employment Equity on behalf of the licensee following the transaction as a whole, with reference to all of its employees in aggregate, that is, employees at all undertakings for which the licensee, following the transaction, holds licences.

6.1 If the application is approved, will the licensee following the transaction maintain the undertaking's existing Employment Equity Policy, or implement its own? Following approval of the transfer, closing and integration of the TELETOON services, the Applicant intends to implement Corus’ Employment Equity Policy.

6.2 Is the licensee following the transaction subject to the 1996 Employment Equity Act (applicable to federally-regulated employers with 100 or more employees)? Yes ( X ) No ( ) If yes, proceed to question 6.7, "On-air Presence". If no, proceed to question 6.3.

6.3 Outline examples of any measures (including hiring and training, apprenticeship programs, work arrangements, etc.) that you have or will put in place for the designated groups (women, Aboriginal peoples, persons with disabilities and visible minorities).

Questions 6.4 to 6.6 -- applicable if between 25 and 99 employees only:

6.4 How do you or will you communicate details of your employment equity policies to managers and staff?

6.5 Have you assigned, or will you assign, a senior level person to be responsible for tracking progress and monitoring results? Yes ( ) No ( ) If yes, what authority does or will that person have to ensure goals are achieved?

6.6 What financial resources do you have or will you put in place to promote employment equity in the workplace (for example, funds for daycare, access for persons with disabilities, etc.)?

On-air presence Information relating to on-air presence and voice-overs is available in Public Notices CRTC 1994- 69 and 1995-98.

25 or more employees only:

6.7 Outline policies and procedures in place, or plans in this regard, to ensure the representation of members of the four designated groups in on-air positions, including voice-overs, where applicable. These policies, procedures and plans should include references to programs produced by the licensee following the transaction, as well as to acquired programming and . Please refer to the Corus’ Corporate Cultural Diversity Report filed on February 15th, 2013.

100 or more employees only:

6.8 Provide the total number and percentage of on-air employees, including voice-overs, (full-time, part-time and temporary) from each designated group, as well as the total number of ALL on-air employees who were employed in the last year, in which reports were submitted to Human Resources Development Canada. Licensees are not required to provide data for each of the four job categories identified individually in the above-mentioned public notices, but rather for the four categories identified in aggregate.

On-Air Employees Number % Women 178 40 Aboriginal Peoples 4 0.90 Persons with Disabilities 4 0.90 Visible Minorities 14 3.14 TOTAL number of ALL on-air employees 446

7. Request for documents to be designated as confidential Sections 30 to 34 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure set out a process by which parties to Commission proceedings may file information on the record of a public proceeding in confidence. A party filing information can “designate” it as confidential at the time it is filed with the Commission (section 31) if it falls into one of the following categories:

a. Information that is a trade secret b. Financial, commercial, scientific or technical information that is confidential and that is treated consistently in a confidential manner by the person who submitted it; or c. Information the disclosure of which could reasonably be expected : i. To result in material financial loss or gain to any person; ii. To prejudice the competitive position of any person; or iii. To affect contractual or other negotiations of any person.

At the time that the party files the information it designates as confidential, it must provide an abridged version of the document along with an explanation of how the information falls into a category of information listed in section 31. The party must provide a detailed rationale to explain why the disclosure of the information is not in the public interest (section 32(1)). The confidential version of the document must be filed separately and must be marked “CONFIDENTIAL” on each page. If the document is filed electronically, each file containing confidential information must include “CONFIDENTIAL” in the file name. The abridged version of the document and the reasons for the designation of information as confidential will be placed on the public record of the proceeding. Please consult the Implementation of new Rules of Practice and Procedure, Broadcasting and Telecom Regulatory Policy CRTC 2010-958, 23 December 2010, and the Procedures for filing confidential information and requesting its disclosure in Commission proceedings, Broadcasting and Telecom Information Bulletin CRTC 2010-961, 23 December 2010, for complete process for filing confidential information.

7.1 Request for documents to be designated as confidential Are you requesting for some information to be designated as confidential? Yes ( X ) No ( ) If yes, you must provide a detailed rationale to explain why the disclosure of the information is not in the public interest :

Pursuant to sections 31 and 32 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the “Rules”), we are hereby designating the financial information in Appendix 5 as well as Schedule 3.3(a) and Schedule 4.8(a) of the Agreement in Appendix 2D as confidential. The sections that have been redacted contain competitively sensitive information whether for the current year or future years that could detrimentally impact Corus if released. This information has been disaggregated for the purposes of this report in a manner that it would not be for other filings, whether to the Commission or for securities purposes.

Book of supporting documents Appended E-Filed Appendix Number and Name (Yes or No) (Yes or No)

Section 1: General Information

1 - Supplementary Brief (mandatory) Yes Yes Section 2: Ownership 2A - Ownership Information Yes Yes 2B - Control Statement and Agreements (or draft) Yes Yes 2C - Corporate Documents (or draft) Yes Yes 2D - Purchase and Sale Agreement (or draft) Yes Yes Section 3: Industry Consolidation and Cross-Media Ownership 3 - Consolidation & Cross-Media Yes Yes Section 5: Funding, Benefits and Financial Statements 5 - Financial Statements Yes Yes

CRTC 139 (2012-09-20) - Ownership Shares ***End of Document*** Application by 8324441 Canada Inc., a wholly owned subsidiary of Corus Entertainment Inc. for authority to implement a change in the ownership and effective control of TELETOON Canada Inc. licensee of TELETOON (an English and French-language Category A specialty programming undertaking) and the Category B specialty programming undertakings the Cartoon Network (Canada), TELETOON Retro English and TELETOON Retro French

April 17, 2013 Introduction

1. 8324441 Canada Inc., a wholly owned subsidiary of Corus Entertainment Inc. (Corus or the Company) is pleased to submit this application on behalf of Bell Media Inc. (Bell) and its trustee for the authority to implement a change in the ownership and effective control of the Category A specialty programming undertaking known as TELETOON (TELETOON Canada Inc.) and the Category B specialty programming undertakings known as the Cartoon Network (Canada), TELETOON Retro English and TELETOON Retro French through the acquisition of all outstanding shares held by subsidiaries of Astral Media Inc. (Astral) in TELETOON Canada Inc. (TELETOON). The existing corporate structure and the history of how it evolved are described more fully below.

2. The present transfer application is part of a broader series of transfers between BCE Inc. and Astral Media Inc. Corus Entertainment Inc. (Corus), through its wholly-owned subsidiaries (YTV Canada Inc. and Nelvana Limited) already holds 50% of the voting shares in TELETOON. Currently, Astral Media Inc., through its wholly-owned subsidiary The Family Channel Inc., holds the other 50% of the voting shares in TELETOON through wholly- owned subsidiaries.

3. TELETOON and its are controlled by its board of directors. Accordingly, neither Astral Media Inc. nor Corus currently control the subject programming undertakings. Corus and Astral also provide a range of series to TELETOON.

4. On March 4th, 2013, Bell Media Inc. entered into a sale purchase agreement (SPA) with Corus in relation to the 50% voting interest currently held by Astral Media Inc. The acquisition of 50% of TELETOON Canada Inc.’s voting shares is subject to the Commission approving the transfer of Astral Media Inc. to Bell Media Inc.

5. Under the SPA attached as Appendix 2D, the total consideration payable by Corus for the 50% voting interest in TELETOON Canada Inc. is $249 million.

6. The purchase price was arrived at by two publicly-traded companies negotiating at arm’s length.

7. As the present transaction involves the transfer of shares, Corus has taken into consideration the Commission’s valuation policy (Broadcasting Public Notice CRTC 2008-57).

8. TELETOON has 20,000 voting shares which are held as follows:

YTV Canada Inc. 4,000 shares Nelvana Limited 4,000 shares Family Channel 8,000 shares 4113756 Canada Inc. 4,000 shares

1 9. The company 4113756 Canada Inc. is 100% owned by 4116381 Canada Inc. which in turn is owned 50% by YTV Canada Inc. and 50% by The Family Channel Inc. (a corporation controlled by Astral Media Inc.). Given the structure, Corus is effectively acquiring 10,000 TELETOON Shares at a price per share of $24,900.

10. The shares held by The Family Channel Inc. (40% of the voting equity) will be acquired by a newly incorporated CBCA company (Newco).Newco will also acquire the shares in TELETOON Canada Inc. (20%) by 4116381 Canada Inc. Newco will then be amalgamated with TELETOON Canada Inc., 4116381 Canada Inc. and 4113756 Canada Inc. (which currently holds 20% of the TELETOON shares) to form TELETOON Amalco. The voting shares of TELETOON Amalco will be 100% owned by Corus Entertainment Inc. TELETOON Amalco (ultimately 8324441 Canada Inc.) will hold the licences for the TELETOON group of channels.

11. This structure will be established through two alternative processes which would each result in the same outcome. This process is illustrated below:

2 12. Upon closing there will be a final purchase price adjustment for a variance to working capital compared to the target working capital range. If the closing working capital is within the range, no adjustment is required. No leases have been assumed.

13. The Enterprise Value of TELETOON, TELETOON Retro, and TELETOON Retro French was calculated based on a 10.5 multiple of the average EBITDA for 2011, 2012 and the budget for 2013 ($43.7 million) after adjusting for margin earned by the shareholders on services provided to TELETOON ($2.8 million). To this, a value of $10 million was attributed to Cartoon Network based on its nascent performance to date to arrive at the total Enterprise Value of TELETOON. TELETOON has no long-term debt and all cash will be distributed to shareholders prior to closing. Therefore the Enterprise Value as calculated is equal to the Equity value which when divided by the number of shares equals the per share price for the 50% interest currently owned by Bell.

14. The 10.5x EBITDA multiple is directly comparable with recent transaction multiples in the sector for like assets. The multiple reflects TELETOON’s position as a highly profitable Category A service with good distribution, exclusive programming contracts with valued suppliers, and a highly recognizable brand.

15. The Category B licences provide strong opportunities for growth as they continue to build audiences.

16. Following the Commission’s approval of the transfers outlined above, Corus will exercise effective control of all four (4) programming services that are the subject of this application namely; TELETOON (the English and French- language services), the Cartoon Network and TELETOON Retro English as well as TELETOON Retro French.

3 The Purchaser

17. Corus Entertainment Inc. is one of Canada’s leading integrated media and entertainment companies. The company was founded in 1999 as a separate publicly-traded company1 built upon the television and radio broadcast assets held by Inc. at that time. Corus has a board of directors and management who operate independently and who adhere to the governance and fiduciary obligations to serve the corporation and all of its shareholders at the standard set by the TSX and the corporate and securities laws of Canada.

18. The Corus Television division is comprised of specialty television networks, services, three conventional over-the-air television stations and the Corus content business, which consists of the production and distribution of and television programs, merchandise licensing, publishing and software. The Company’s other multimedia entertainment brands include YTV; Treehouse; Nickelodeon (Canada); W Network; OWN: (Canada); W Movies; Sundance Channel (Canada); Movie Central (including HBO Canada and Encore Avenue); Nelvana; Kids Can Press; and Toon Boom. The Company also has a majority interest in CMT (Canada); Telelatino (TLN, Euro World Sport, Mediaset Italia, SkyTG 24, Teleniños and TLN En Español); ABC Spark; and Cosmopolitan TV.

19. Corus also owns 37 radio stations, situated primarily in high growth urban centres. The Corus radio portfolio includes a network of leading news- stations that provide with the best in news and talk radio. We also operate stations in , modern/mainstream rock, country, greatest hits and adult contemporary/classic hit radio music formats.

20. Corus assets include Nelvana, one of the world’s leading creators, producers and distributors of children’s and animated programming, and related consumer products. Nelvana is the cornerstone of Corus’ international distribution, production and merchandising strategy and is renowned for such globally recognized brands as Babar, Franklin and . Kids Can Press, Canada’s leader in children’s publishing and Toon Boom, a leader in digital content and animation creation software, are also part of the Corus family. The Toon Boom headquarters are located in .

21. With Nelvana, Corus has made a very significant investment in the Canadian production industry. Our is available in more than 150 countries and in more than 40 different languages.

22. To ensure continued growth for Corus Television we have developed a business strategy for our Canadian Content and we have been successful in growing our television business in foreign language markets around the world. We focus not just on content but also on related products such as toys

1 Corus trades on the (TSX) under the stock listing CJR.B.

4 and other merchandise. Corus has also invested in international channels, and new media applications related to our content brands.

23. The Corus vision is to be globally recognized as Canada’s most influential entertainment company. We’re achieving that vision with the hard work and commitment of our talented employees, many of whom are award winners in their fields. We also have a strong set of corporate values and we believe that honouring them drives our success. These values help provide clarity and focus – we are proud to live them each day.

ACCOUNTABILITY – We do what we say we’ll do – no excuses.

INITIATIVE – We empower employees to make great things happen.

INNOVATION – We are committed to creative thinking that leads to breakthrough ideas and superior results.

KNOWLEDGE – We believe in continuous learning and the sharing of our insights and ideas.

TEAMWORK – We believe that the greatest value is realized when we work together.

24. Corus is one of Canada’s largest producers of high quality Canadian radio and television programming. We recognize that in an environment where Canadians have the ability to access a wide variety of information and entertainment means that we need to provide high-quality content each day. Our ratings, financial performance, and industry awards suggest that we are on the right track.

25. To illustrate this, please find attached as Appendix “A” a short review of our achievements and milestones over the past 12 months.

26. Our entertainment and informational assets are achieving results that make Corus an industry leader in Canada, and a small, but significant player in the international marketplace. We believe that our success contributes to a stronger Canadian broadcasting and production industry, a stronger economy, and to stronger communities across Canada.

27. We believe we can achieve our objectives through international growth of our Nelvana content; by continuing to grow domestically and by developing new Canadian brands for the Canadian and world market.

28. Corus also believes that investing in our people is fundamental to our success. So we have established Corus U, a unique in-house learning and development program with a dedicated team to develop training. In Fiscal 2012, Corus U delivered over 7,000 hours of training to employees and directors. We have structured performance management systems and mentoring so everyone understands what to do and how they are doing.

5 29. Corus is also dedicated to leadership in the area of new technology utilization. We recognize the importance of making content available to our audiences on both traditional and new platforms such as mobile television and video-on-demand. For example, Corus was also an early adopter of HDTV and the so-called OTT platforms for our pay movie channels.

Competitive Conditions

30. Corus’ Category A broadcast networks such as YTV, W Network, CMT (Canada), OWN: Oprah Winfrey Network (Canada), its conventional television stations and its Category B networks such as Nickelodeon (Canada) and Cosmopolitan TV, compete for audience, advertising revenues, and programming with other conventional networks such as CBC, CTV, Global, , other Category A and B channels, independent television stations and basic cable program services as well as other media, including DTH television services, DVDs, Blu-Ray, game platforms, print media, outdoor billboards and the .

31. Television services compete for programming, audiences and advertising revenues with other stations and cable networks in their respective coverage areas and, in some cases, with respect to programming, with other station groups, and in the case of advertising revenues, with other local and national media. International media are also increasingly a presence in the Canadian market.

32. OTT services such as Netflix are expected to make further inroads in the Canadian media landscape in the coming years. Whether OTT becomes a substitute for traditional broadcasters will depend on their ability to secure programming rights and to increase subscriber penetration. In order to satisfy their subscribers, OTT services will need to acquire a wide range of content. Some of this will be exclusive to them. Most OTT activity occurs outside of the Canadian regulated system and has represented an economic loss to this structure. This is well documented in a CRTC commissioned paper. 2

33. There is increasing evidence that OTT combined with U.S. linear viewing and Internet TV viewing are taking a sizeable chunk out of the Canadian viewing shares. The statistical analysis remains complex but our internal analysis of the combined impact of U.S. linear television viewing and just Netflix OTT viewing in Canada pulls the total Canadian service share down from a factor of 100 to 79. We may be some time away from being able to determine the exact share erosion, but it is clear that many Canadians are not watching Canadian services at least part of the time. We need to pay attention to a 21% share loss. When Canadians are using foreign OTT, it represents a loss

2 “Market Impact and Indicators of Over the Top ”: 2012, Peter Miller and Randal Rudniski, March 30, 2012.

6 of revenue to Canadian operators such as Corus but also to all Canadian producers and distributors of content.

34. Coupled with competing for viewers and subscribers is the competition for content. This may increase programming costs for traditional broadcasters like Corus. Pay television has come under the most pressure initially. Our subscriber growth has slowed and our programming costs have increased. We now have greater competition for both linear and new platform rights. The Commission is well aware that digital technology is fragmenting our markets and influencing the economics of the regulated system.

35. The business of producing and distributing children’s television programs is also highly competitive. Corus competes with a variety of international companies, including HIT Entertainment (a division of Fisher-Price) and several U.S. studios. U.S. studios are substantially larger and have greater financial resources. Many have their own television networks on which their in-house productions are aired.

36. All of which is to say that over the past few years, the television market has fundamentally changed.

37. Despite the current environment, Corus is confident that the long-term outlook for the worldwide animation business and the children’s entertainment sector is favourable. Future growth in the sector is being fueled by:

 great storytelling;  the growth of the 3D animation market;  the of audiences from traditional conventional networks to specialty television networks;  the growth of services, providing a platform for additional cable, satellite, MDS and IPTV services and thereby new programming opportunities;  the continued international expansion by all types of programming services;  the growth for content featuring recognizable characters on multiple platforms; and  the emerging platforms for content distribution i.e. video-on-demand (VOD), Subscription video-on-demand (SVOD), over-the-top (OTT) services, smart phones, tablets and video games.

38. In Canada, the total production market is estimated at roughly $5.9 billion.3 It is unlikely that this market will grow significantly so as a producer, we need to look abroad. As a Canadian broadcaster we also need to prepare for domestic market competition. There’s no longer anywhere to hide from competition.

3 Profile 2012 – An Economic Report on the Screen-based Production Industry in Canada. Canadian Media Production Association.

7 39. Meanwhile the real growth potential for Canadian broadcasters and producers is in international markets. The Canadian market, even with government funding and tax credits etc. is not large enough to sustain the quality of production that the Canadian system requires, however, the world market can do so. According to industry sources, total spending on filmed entertainment – which includes feature films, video, television shows, animation and other programming worldwide – is expected to grow from an estimated US$85.4 billion in 2011 to US$99.7 billion in 2016. Emerging electronic platforms will be the principal growth driver of filmed entertainment globally and will offset any declines in physical home video sales. Corus is confident that Canada can compete in this space.

40. The development of Corus’ Kids and Family specialty networks and Corus’ Nelvana business has allowed the Company to build its position in the kids’ entertainment marketplace by expanding revenue sources through family co- view opportunities, which attract advertisers looking for moms and dads, and by consolidating the development streams to ensure that Corus continues to create superior content, driving ratings in Canada and abroad. Additionally, this integration enables us to maximize new digital platform opportunities, which are increasingly important segments of the market.

41. Our international competitors are goliaths in comparison to Corus. We need content and scale to even get a seat at the content marketplace table. Corus has already been investing as a broadcaster and as a producer to gain market entry internationally.

42. Corus Television is using its programming library to help launch new linear broadcast channels internationally. One such channel initiative, KidsCo, was launched in Fiscal 2007 to help increase the profile of the Nelvana brands. Corus Television owns 49% of the channel in partnership with NBCUniversal. KidsCo is an international children’s television channel for preschoolers, children aged 6-10 and families. KidsCo is available in 100 countries in 17 languages and reaches 15 million subscribers worldwide. KidsCo is distributed to satellite, cable and IPTV platforms across , Asia, Africa and . KidsCo’s range of responsible, feel-good and dependable content is also sourced from across the globe. This helps Corus to understand the many intricacies of the world market.

43. Nelvana’s library now has well over 4,000 half-hour animated episodes including such well-known properties as Babar, Franklin, Max & Ruby, Mike the Knight, Beyblade, Sidekick, Scaredy Squirrel, Mr. Young and . A leader in rights management, Nelvana is on the vanguard of digital opportunities. Beginning in Canada with Treehouse Direct, a digital download storefront, Nelvana has opened up new avenues for delivery of its content through strategic partnerships with pioneering companies in the emerging digital landscape.

44. Additionally, Nelvana is involved with two exciting children's channel ventures: and KidsCo. qubo, the U.S.-based children's channel, is now

8 seen in more than 42 million homes. KidsCo, a partnership between NBCUniversal International and Corus Entertainment/Nelvana, offers the rest of the world 4 a 24/7 multi-platform channel dedicated to delivering family-friendly programming. In fact, as of January 2013, KidsCo began broadcasting from Corus Quay via three feeds.

45. Corus is renowned not only for its investments in content but also for its major infrastructure investments. In September of 2010, Corus officially opened its new Corus Quay broadcast facilities. The state-of-the-art media production, broadcast and distribution facility features advanced technologies and organizational design that sets a new standard for broadcast and content operations throughout the world. We successfully brought together 11 independent Toronto-based operations, including 24 television services, 3 radio stations and over 1,100 employees. Built for growth, the configuration of the operation allows for up to three times as many services to be delivered from the facility.

46. Corus has also recently invested in new premises and facilities for our radio station clusters serving Kitchener-Waterloo, , , Cornwall and .

47. Corus’ leadership in children’s programming assists all Canadian producers in establishing credibility and hence success in world markets. This was illustrated by the Corus presence at MIP this year and the focus there by the world production community on kids programming.

48. As both a producer and packager of content, Corus is well-positioned to meet the challenges of these new markets.

49. Corus not only has the ability but also the means to grow and contribute meaningfully to the Canadian broadcasting system.

50. These are the factors that are at the core of why Corus is seeking to acquire the control of TELETOON and its suite of services. Our plans are set out below.

The TELETOON Services – Ownership History and Structure

51. TELETOON operates four (4) specialty programming services:

i. TELETOON English and French – a Category A specialty programming undertaking ii. TELETOON Retro English – a Category B specialty programming undertaking iii. TELETOON Retro French – a Category B specialty programming undertaking

4 KidsCo is not available in .

9 iv. Cartoon Network (Canada) – a Category B specialty programming undertaking

52. The TELETOON service was first licensed in 1996 (Broadcasting Decision CRTC 96-598) as an analog specialty service providing animation programming in both English and French via English and French-language feeds. At that time it was owned by a consortium of various other Canadian specialty services and producers made up of The Family Channel Inc. acting as managing partner at 53.3% (owned by Astral Media & International Communications (WIC)), YTV Canada Inc. at 26.7% (owned by Shaw Communications), and Cinar and Nelvana with 10% each.

53. In 2000, Corus, through its acquisition of WIC Premium Corporation, a subsidiary of WIC, stepped up to a 40% ownership interest in TELETOON (Broadcasting Decision CRTC 2000-222 and 2000-752). Corus did not control or operate TELETOON; effective control was exercised by its board of directors.

54. In 2004, after an unfortunate series of events, Cinar was purchased by a group led by Michael Hirsch and Toper Taylor who had sold the Nelvana production company (but not the shares in TELETOON) to Corus in the same year. Cinar was renamed Cookie Jar. As a result, Corus and Astral each held 40% of the equity and Cookie Jar held the remaining 20%. The company was controlled by its board of directors.

55. In 2006, Cookie Jar sold its interest in equal proportion to Corus and Astral in the manner contemplated by the shareholder’s agreement. As a result, each of Astral and Corus held 50% of the equity and control remained with its board of directors.

56. Throughout its operating history from 1997 to date, John Cassaday (President and CEO of Corus) and Heather Shaw (Executive Chair of Corus) have been members of the board of directors of TELETOON Canada Inc. and have contributed to the strategic vision and oversight of TELETOON and its suite of services. In this sense Corus is the only entity that has been involved since TELETOON’s inception.

57. The Category B services operated by TELETOON were licensed in 2005 and 2011 as follows:

 TELETOON Retro English - Broadcasting Decision CRTC 2005- 511, October 21, 2005  TELETOON Retro French - Broadcasting Decision CRTC 2005-510, October 21, 2005  Cartoon Network – Broadcasting Decision CRTC 2011-687, November 4, 2011

10 58. As a group and individually, the TELETOON services provide world-class programming devoted to animation and animation-related content for all age groups.

The Rationale, Structure and Process of the Transaction

59. The operating structure and actual processes are a function of TELETOON’s history. Corus and Astral have a “hands-on” operating role in the TELETOON channels. Corus originates the service from its broadcast centre at Corus Quay; sells the TELETOON channels’ advertising inventory nationally (excluding ), does on-air promotion, and contributes a small proportion of the Canadian Content through Nelvana Limited. Astral Media provides administrative support such as human resources management; office services (reception, mailroom etc.); law, business affairs, and regulatory advice and tasks; IT and operation of the websites and other interactive. Cookie Jar had supplied programming and continues to have a programming output deal with the channels.

60. The Unanimous Shareholder’s Agreement (USA) dated September 1st, 2006 (which was filed with the CRTC and approved at that time) establishes the respective rights of the signatories and the process by which a party can dispose of its interest. Article V of the USA establishes the rights and obligations concerning share transfers, charges on shares, and changes of control of a shareholder. None of these rights are particularly novel in corporate law or in policy terms. These rights include a right of first refusal5 (ROFR), sale provisions,6 and pre-emptive rights.7

61. The present transfer application is part of a broader series of transfers between Bell Media Inc. and Astral. On March 4th, 2013, Bell Media Inc. entered into a purchase agreement with Corus in relation to the 50% voting interest currently held by Astral. The acquisition of 50% of TELETOON Canada Inc.’s voting shares is subject to the Commission approving the transfer of Astral to Bell Media Inc. which involves a proposal to divest a number of broadcasting assets, including Astral’s ownership interest in the TELETOON services.

62. With the Astral decision to sell, and Bell Media Inc.’s decision to divest the Astral ownership interest in TELETOON, it is logical for Corus to acquire the shares and now take control and complete responsibility for a broadcast undertaking it has helped nurture since 1996.

5 See USA Section 5.7. 6 USA section 5.8. 7 USA Section 5.8.

11 The TELETOON Networks in a Nutshell

TELETOON – English and French

63. TELETOON is a Canadian broadcast service predominantly focused on animation and animation-related programming catering to kids, youth and adult audiences that is delivered in both English and French. Themes focus on action, adventure, superheroes and comedy. Fuelled by some of the best animation in the world, TELETOON delivers Canadian audiences such hits as Lego Ninjago, Amazing World of Gumball Dragons, Kaijudo and . TELETOON is also well known for its blockbuster movie line up.

64. TELETOON spends it daytime schedule (from 6am to 5pm) focused towards children aged 6-11. Shows in this block include classics such as and Scooby Doo! as well as domestic made hits such as and Just Kidding.

65. The 6pm to 8pm time period offers a co-view block that appeals to a broader audience that includes kids 6-11 with their parents. Mudpit, and Star Wars: The Clone Wars are examples of programs.

66. Post 9pm TELETOON broadcasts under the '' branding and aims for a young adult audience with a taste for the smart and the irreverent including titles such as , and .

67. In the evening TELETOON is the top channel watched by men after the sports services.

TELETOON RETRO – English and French

68. As the name implies, TELETOON Retro is a Canadian specialty service that assumes a retrospective look at the greatest animation titles of all time. The whole family makes up the audience on this fun-for-all service that is delivered in both English and French. TELETOON Retro promises discovery for new audiences and nostalgia for existing fans with programs such as Bugs Bunny and Tweety, Spiderman Classic, He-Man and .

69. TELETOON Retro focuses its daytime schedule (from 6am to 5pm) on children aged 6-11. Shows in this block include classics such as Alvin and the Chipmunks, The Adventures of Tintin and The Smurfs.

70. The 6pm to 11pm time period offers a co-view block that appeals to a broader audience that includes children 6-11 and their parents. Looney Tunes and are both audience favourites.

12 Cartoon Network Canada

71. Cartoon Network provides unique and diverse entertainment experiences to kids and families through hilarious animated and live-action content. The Cartoon Network brand is seen in over 168 countries world-wide. Cartoon Network Canada delivers Canadian audiences such hits as with Finn and Jake, Destroy Build Destroy, and Ben 10.

72. The day time period (from 6am to 5pm) serves kids aged 6-11. Shows in this block include classics such as Regular Show and The Marvelous Misadventures of Flapjack.

73. The block appeals to kids and teens with shows such as , Dude What Would Happen and Level Up.

74. Post 9pm, the network broadcasts under the '' branding offering original and acquired animated and live-action series for young adults including titles , American Dad and Robot Chicken.

The Corus Vision for These Services

75. To ensure Corus’ continued success domestically, we have over the last several years grown organically through of successful new Category B services such as Cosmopolitan TV, Nickelodeon (Canada) and ABC Spark. We have also made strategic acquisitions such as the acquisition of Canadian Learning Television (now operating as the OWN: Oprah Winfrey Network - Canada), the Drive-In Classics Channel (now operating as Sundance Channel - Canada) and Sex TV (now known as W Movies).

76. Having our programming channels associated with strong brands has been fundamental to our success. Branding was also key in growing our pay subscriber base through securing access to the highly acclaimed and valued content known as HBO Canada.

77. Having strong and growing Canadian media companies with compelling brands will also serve many public interests goals. In the context of having global media companies that have strong brands and numerous and ubiquitous platforms with which to compete anywhere in the world, it is essential that Canadian Content providers are able to leverage the content not just domestically but on a worldwide basis.

78. The best opportunities for a strong Canadian production sector will be by creating windows not just in Canada but globally. Corus can play a key role in achieving this critical public policy goal. We can assist the independent production community to gain a foothold in international markets. We have a plan to do this both through our tangible benefits proposals and through our existing relationships with independent producers. Currently, Corus purchases about 85% of the Canadian Content for its specialty and pay

13 services from independent producers and we will leverage these relationships for the benefit of the Canadian broadcasting system as a whole. This starts by having high quality services.

79. The foundation for success abroad is success at home. Corus’ contribution to TELETOON’s success has been significant. We have demonstrated our commitment to TELETOON and are therefore the natural party to steward the services and their important brands.

80. The Corus goal is to develop content and the ability to serve Canadians through these new platforms to keep audiences within the Canadian system as it evolves. This, however, requires resolve and enormous investment.

81. Specifically, by consolidating ownership, Corus will remove the meaningful operating uncertainty that has clouded TELETOON’s operations over the last several months. Further, as Corus has already established its leadership among kids, we will seek to sharpen TELETOON’s focus on adults and young adults, providing expanded program offerings to all Canadians within the animation programming genre. Corus’ proven track record as growers of networks and prudent operators will strengthen TELETOON. We will expand the programming opportunities for Canadian producers through increased CPE and benefits spending. As a leader in the international distribution of animated programming, Corus will provide more international sales opportunities for Canadian producers through the credibility that is conferred on Canadian producers of series licensed by Corus-operated networks.

82. Corus will bring that expertise to TELETOON through its strong creative vision for the network and deep relationships with international partners. Corus will expand the appeal of TELETOON animation programming beyond the kids audience, leveraging its experience as successful operators of young adult (ABC Spark, Cosmopolitan TV), and adult services (W Network, Movie Central, OWN Canada). This expanded programming vision will create further opportunities around the world for a wider range of Canadian producers, both as suppliers to TELETOON and in partnership with Corus. Additionally, Corus’ proven record as a successful operator of channels and investment in new platforms will ensure TELETOON also benefits from our investment in new technologies and platforms necessary to succeed in the rapidly changing media environment.

83. Corus already provides network operations services for the TELETOON networks, and, as noted, recently assumed network operations responsibility for the KidsCo networks around the world out of its Corus Quay facility. Corus’ proven leadership in international program sales with series like Mike the Knight, Babar, Franklin and others, illustrates our world-class capabilities, and these skills will accrue to program producers for TELETOON in the event that the Corus’ application is approved.

14 84. Corus is further committed to increasing its investment in English and original programming to support the growth of the TELETOON services.

85. Acquiring the effective control of TELETOON Canada Inc. will allow Corus to fully align these services with our specialty television group, which focuses on providing superior program offerings to Canadian viewers on a variety of platforms.

86. Corus believes that TELETOON Canada Inc. will benefit from further integration into the successful suite of Corus’ broadcast assets. Our success in the specialty television segment is due to our expertise in brand stewardship, world class on-air promotion and marketing and a deep commitment to cross platform digital rights exploitation and distinctive programming visions. A key element of this is our audience and consumer research capability.

87. While there is some overlap of audiences targeted by YTV and TELETOON, it is important to note that TELETOON is not a kids channel but rather an animation service targeting audiences of all ages during the different day parts. The TELETOON Retro and Cartoon networks also have a distinctive programming mandate.

88. Corus intends to use its leadership, passion and expertise for kids and youth culture to further build TELETOON’s entertainment offering to deliver the best in kids and family programming to all Canadians.

89. Our continued growth and success in building networks with broad appeal will benefit the Canadian broadcasting system through increased investments in Canadian programming, further strengthening the Canadian production community. Our goal is to keep Canadians inside the regulated system, by their choice.

90. By integrating the operations of the TELETOON services within the Corus group of specialty and pay services we will be able to leverage not only our superb digital broadcast platform that we have at Corus Quay, but we will be able to leverage our significant consumer insights, marketing expertise and the international distribution opportunity we have created around the world through our distribution and marketing of the Nelvana content.

91. Corus will use its strength and breadth in programming acquisition to secure additional program rights to enhance the service and its cross promotional platforms to increase the visibility of TELETOON and its suite of services.

92. We also intend to build a strong team in Quebec to serve francophone viewers there and across Canada.

93. In sum, Corus intends to continuously improve our understanding about what Canadian audiences, subscribers, and distributers want from

15 TELETOON. We will strive to execute our programming plans superbly well and we will market and promote the services at the highest standard.

Proposed Regulatory Framework for the Operation of the TELETOON Services

94. TELETOON’s broadcasting licence as well as the licences for TELETOON Retro French and English are currently under renewal. Corus, as a shareholder of TELETOON, has had the opportunity to review the licence renewal applications filed by TELETOON last fall. We support and request that the Commission renew these licences in the manner requested by the licensee in these applications.

95. We would however request that should the Commission approve the transfer of ownership and control of TELETOON and the TELETOON suite of services to Corus that it be mindful that Corus intends to align these services within its existing group of services.

96. As the Commission is aware, Corus participated in the Group Based Licence Renewal Hearing in 2011. Its suite of specialty and pay services now operates under the Group Based Licensing model established in Broadcasting Regulatory Policy CRTC 2010-167. Our Group Based Licensing decision (Broadcasting Decision CRTC 2011-446) established certain parameters as they relate to CPE and PNI spending.

97. Corus intends to include TELETOON and TELETOON Retro English within its existing group of English-language services from a group based licensing perspective. This would mean that TELETOON and TELETOON Retro would require additional amendments to their conditions of licence to accommodate this integration.

98. With regards to TELETOON Retro French, since this is a French-language service, we would propose to operate this service under the proposed terms contained in the licence renewal application filed by TELETOON (Application No. 2012-1162-2). The Corus plans for the French-language service are extremely important to its overall vision and strategy for the larger Corus Group.

99. Corus intends to become a significant contributor to the development of the French-language Quebec broadcasting environment. All viewer and customer interface will be overseen by capable Quebec-based francophone broadcast executives.

100. All programming, marketing, communication, advertising sales and matters relating to pricing, packaging and cross platform content initiatives with broadcasting distribution undertakings will be managed by our Quebec office.

16 101. Since the Cartoon Network is operating under its first licence term and it is not up for licence renewal (Broadcasting Decision CRTC 2011-687), we are not proposing any changes to the conditions of licence following the transfer of this service to Corus. Accordingly, Corus does not wish to include Cartoon Network as part of its Group based licensing framework.

102. Corus currently operates another newly licensed Category B service (ABC Spark - Broadcasting Decision CRTC 2012-93) that is also operating under its first licence term and which does not form part of our group of services subject to group based licensing. We anticipate that the inclusion of these two services would be reviewed at the time the Commission next considers our group based licensing in 2016.

103. This application is not conditional upon these changes. Corus understands that the proposed changes to the conditions of licence of these services would require a separate application pursuant to Part 1 of the Canadian Radio- television and Telecommunications Rules of Practice and Procedure following completion of the transfer of control of these services; Corus would make the subject applications to the Commission on an expedited basis.

Benefits of the Transaction

Intangible Benefits

104. In addition to the tangible benefits initiatives Corus is proposing, approval of this application will result in a number of intangible benefits as well. TELETOON will be owned by an entertainment company focused on growing the attractiveness of each of its specialty services. Such a focused approach is necessary in an increasingly competitive environment with more and more choices, regulated and unregulated, being available to Canadians. Given the plethora of choices available to Canadians today, successful specialty services need to maximize all available synergies and efficiencies. Under Corus’ ownership, TELETOON’s success will be assured by becoming part of a company that is focused on operating specialty services and creating outstanding Canadian Content.

105. Corus has a proven record of strengthening the services it acquires by building their brands and developing strong program offerings. Corus will bring the same skills to TELETOON and will build upon its success to develop each service into a strong branded specialty service responsive to its target audience. This will ensure that these services provide a strong Canadian programming offering which will enhance diversity in the Canadian broadcasting system.

106. In addition to on-screen enhancements, Corus plans to improve the TELETOON digital interactive media presence. We will utilize our interactive expertise to expand upon the current web offering to provide for a

17 fulsome and an interactive online community. All of these initiatives will ultimately result in greater contributions to Canadian programming.

107. Corus will be developing a Montreal-based team to operate the French- language services it is acquiring in this transaction. The French-language services in TELETOON will benefit with this direct in market management.

108. Corus will establish a new, strong, well-operated, independent media company in the Quebec and wider francophone market. Corus will bring its significant capabilities to this market and will offer more choice, healthy competition and diversity of voices to the market.

Tangible Benefits

109. We believe that Corus’ acquisition of the effective control of the TELETOON group of services will directly benefit the Canadian broadcasting system as a result of our strategy to fund the development, production, exhibition and distribution of high quality Canadian programming.

110. The Corus benefits proposal is built upon the foundation principle of building diversity of voice through research and development (R&D) for on-screen programs; in training and in production; and in developing understanding of the media environment. Our funds will also foster the development of how the media can educate Canadians about a key issue facing all of us – obesity and public health. Funds will be used by recipients across Canada and by both official language groups.

111. Our proposal also represents an additional incremental investment in Canadian programming and other eligible benefit proposals totaling $24.9 million, consistent with the Commission’s policy on benefits contained in Broadcasting Public Notice CRTC 1993-68 and Broadcasting Public Notice CRTC 2007-53.

112. 85% of the proposed tangible benefits are directed towards on-screen initiatives.

113. The on-screen initiatives total $21,165,000 and will be paid out over seven years. This represents new yearly investments of over three million dollars per year. We anticipate that 75% of the funds for exhibition of Canadian programming will be spent with independent Canadian producers. 90% of the new programming funding will be directed towards animation programming.

114. The confidential nature of the transaction involving publicly-traded companies has meant that Corus has not been able to confirm all of the details of all initiatives with the specified recipient prior to the filing of this application. Our criteria are that the funds will be used for specific programs and not become part of the general revenues of the recipient. We are confident that each project complies with the Commission’s policies and that

18 each recipient does as well. In some cases we are extending commitments that the Commission has approved in the past.

115. Benefits targeted at schools will likely be in the form of student scholarships or related stipends or funding special programs of study in the media field. These would be administered by the school.

116. Corus will provide additional details of each of these forthwith after filing.

Programming

117. Corus will allocate $16,615,000 of incremental funds to the production of high quality Canadian programming.

118. As noted, 90% of this funding will be directed to animation programming.

119. Each year $125,000 of this amount would be targeted to the Telefilm Canada Canadian Talent Fund (for a total of $875,000) to support emerging and established Canadian filmmakers in the animation genre.

120. As is our current practice, Corus will work with producers from across the country to identify, develop and fund the best proposals. We will ensure that these incremental monies will stimulate the production of new, innovative and relevant Canadian program offerings for broadcast on the TELETOON networks.

Script and Concept Development

121. Corus will establish a script and concept development fund of $2.8 million payable over seven years. The Corus fund governance, management and administration will be conducted by knowledgeable third parties. No Corus administrative fees will be incurred in relation to this fund.

Export Initiative

122. The Corus Export Initiative of $1,750,000 will assist Canadian independent producers to gain access to international markets. Funds will be made available for preparing and translating international sales packages and for grants for travel and other expenses associated with attendance at world markets. The Corus Export Initiative Fund governance, management and administration will be conducted by knowledgeable third parties. No Corus administrative fees will be incurred in relation to this fund.

Tangible Off-Screen Benefits

123. The Corus tangible off-screen proposals total $3,735,000, which will be paid out over seven years. Some of the items will represent extensions to funding contributions that will run out over the anticipated seven year term to which this plan applies.

19 124. The proposals can be grouped into three categories: 1. Assistance for industry festivals; 2. Training and Development and 3. Research.

Industry Festivals

125. Industry Festivals have become an important method by which Canadian producers can attract attention for their works and meet producers and the programming buying community both in Canada and from abroad.

Toronto Animation Arts Festival International (TAAFI) $175,000

126. The TAAFI festival was established to serve the 50 successful studios in the Toronto region, the 10 schools of animation, and the community of enthusiasts. It provides an opportunity for screening works, formal training sessions and creates a marketplace.

Ottawa International Animation Festival (OAIF) $175,000

127. In similar fashion, the OAIF assembles animators, program buyers and fans for four days of screenings, information exchange and business development.

Animaze Festival $175,000

128. This Montreal-based animation festival provides another showcase for animation producers to showcase and market their works.

TIFF Kids – Toronto International Festival $175,000

129. TIFF has become one of the pre-eminent festivals for showcasing major pictures from around the world. Less well known is the role that TIFF Kids plays in showcasing and establishing a market for the works of Canadian children’s programming producers.

Banff World Media Festival $175,000

130. Banff is both one of Canada’s oldest but also most important festivals where delegates from all over the world participate. In recent years Banff has expanded to provide a place where producers of traditional forms of film and television meet with the digital production community. It marked its 30th anniversary of this annual forum of business and creative opportunities for those in television and in new media. The Banff TV Foundation strives to recognize, develop, celebrate and encourage excellence in television programming within Canada and around the world. Independent producers rely upon the Banff Festival to meet international commissioning editors and potential co-production partners in an efficient manner. Corus, as one of Canada’s strongest contributors to the creation of high quality Canadian feature film, drama and animation content, will fund panel sessions with a

20 particular focus on kids and women’s programming or some form of new producer mentor program, to be determined with the foundation.

DigiFest $105,000

131. DigiFest is a digital media festival in Toronto associated with 14 post- secondary academic institutions that brings together academics, business and the general public for a festival about interactive and mobile media, gaming and art & design.

Industry Training

The Canadian Film Centre (CFC) $500,000

132. This centre founded by Norman Jewison, a Governor-General Award and Academy Award nominated filmmaker, opened its doors in 1988 as a film training centre. The CFC has grown into Canada’s largest institution for advanced training in film, television and new media. In 25 years, the CFC has produced movies, short films, interactive films and games, TV pilots and a host of new media applications that are revolutionizing the content business. The CFC helps shape talent and innovation in Canada’s media industries by launching new programs and initiatives that prepare, educate and benefit emerging talent for the digital age and continue to bring inspiring storytellers to the world. The benefit monies for the CFC will be utilized to support the CFC’s training programs in film, television and new media. As Canada’s leading institution for advanced training in film, television and new media these training programs promise participants an innovative , creative industry partnerships and cutting edge production experience.

Sheridan College, Faculty of Animation, Arts and Design $220,000

133. Sheridan is one of the pre-eminent schools of animation in the world. Its graduates make an enormous creative contribution each day to the animation realm.

The National Screen Institute $175,000

134. The National Screen Institute – Canada (NSI) is a charitable, not-for-profit organization with headquarters in Winnipeg. NSI is a national film, television and digital media training school for writers, directors and producers.

Mount Royal University $175,000

135. The benefits funds will be targeted to the Broadcasting and Communications programs of this school located in Calgary.

21 Algonquin College $175,000

136. The Algonquin College animation program focuses on teaching students the skills necessary to meet the high standards required to achieve success in the animation production industry.

University of Waterloo – Stratford $90,000 over six years

137. Corus was one of the companies involved with the creation of the Stratford campus of the University of Waterloo.

138. The Waterloo-Stratford Campus is a satellite campus of the University of Waterloo in the City of Stratford, Ontario, Canada. It is part of the Faculty of Arts. The central areas of study include digital media and global enterprise – a study of business on the international stage covering the disciplines of political science, economics, history and culture.

139. The Corus contribution will commence in the third year (Fiscal 2015) and serves to extend an existing benefit which ends in Fiscal 2014.

YMCA $125,000 over five years

140. The YMCA was established over 160 years ago as a charity dedicated to the health of both individuals and communities. The organization with its focus on inclusiveness and accessibility means that they serve people of all ages, backgrounds and abilities through all stages of life. There are 45 YMCAs and 6 YMCA-YWCAs in Canada that offer programs and services tailored to each community’s needs. Together, they serve 2 million people in more than 1,000 communities across Canada.

141. The Y established a program targeted to young people (16 to 21) where young talented producers would teach basic media skills using professional equipment. Most of the students are from the inner city and are from new immigrant families. The program is intended to teach not only the skills but to show these young people that they have a voice and that they can develop the skills to make a positive contribution to their families and to the community at large by using the communications skills taught. The program operates throughout the year and involves between 12 and 20 young people at a time as well as two instructors.

142. The work that is produced is both creative and significant. For example, two years ago one 17 year old produced a one minute video on the subject of healthy eating habits. This video was selected by the City of Toronto Public Health department as an effective tool to use in schools and elsewhere about this important topic.

143. The Corus contribution will commence in the fourth year (Fiscal 2016) and serves to extend to an existing benefit contribution which ends in Fiscal 2015.

22 City Life Film Project $25,000 over five years

144. The City Life Project is similar to that of the YMCA but it is targeted at emerging talents who have already received training. City Life takes a few very promising film makers and links them with an accomplishing professional for a few months. They work together to tell stories from their communities in the form of short films.

145. The Corus contribution will commence in the fourth year (Fiscal 2016) and serves to extend an existing benefit which ends in Fiscal 2015.

Concerned Children’s Advertisers (CCA) $200,000 over four years

146. The CCA is a non-profit organization based in Toronto, founded in 1990. Its mission is to be the credible, caring and authoritative voice of responsible children’s advertising and communications in Canada, working in partnership with government, educators, parents and experts to identify and address issues of concern in children’s lives. Through a series of child- directed television public service messages (over 40 to date), and an education program for teachers, parents, and community leaders, this organization has produced and delivered over 40 public service announcements often in partnership with Health Canada on issues of challenge in children’s lives, including: substance abuse, child abuse, self-esteem, active , bullying and media literacy.

147. One of its initiatives called “Long Live Kids! – What’s New Today?” includes two exciting live-action 30 second television public service messages and a new online education workshop called “Move Your Body” and “Use Your Head”. These initiatives have been designed to motivate, inspire, and empower children to take on a role for themselves and make smart choices when it comes to their daily food and activity habits. With recent issues related to childhood obesity, these initiatives are particularly relevant. This serves to extend an existing benefit program.

Research

Canadian Communications Foundation $170,000

148. One of the best ways to help to plot the future of our industry is to understand its past. The Canadian Communications Foundation (CCF) is affiliated with Athabaska University and is compiling a history of Canadian broadcasting and radio including television stations, including networks, programs, broadcasters, policy development, milestone events and awards. It has established an important research directory of materials about the industry.

149. The CCF was established in 1967. The funds will be directed at developing more comprehensive content.

23 The Corus Inner City Childhood Obesity Research Initiative (CICCORI) $900,000

150. Corus has developed strong and well-known brands for children’s programming and other related content including children’ books, merchandising, games and other related products. As such, Corus believes that it should endorse and promote initiatives that help educate and motivate children to adopt healthy active living practices.

151. In Public Notice CRTC 1993-68, Application of Benefits Test as the Time of Transfers of Ownership or Control of Broadcasting Undertakings the Commission stated as follows:

The Commission agrees with the comments regarding the importance of research and development, particularly in this time of rapid technological change. Accordingly, the Commission will generally consider research and development initiatives as acceptable tangible benefits for radio, television and cable undertakings provided that applicants demonstrate that the areas covered by such initiatives will be of benefit to the public they serve and/or to the industry or the broadcasting system as a whole.

152. Increasingly children in Canada are developing life-crippling problems because of childhood obesity. The statistics around these issues are cause for alarm:

 There are shocking statistics out there. Statistics Canada tells us that one in four Canadian children is overweight or obese – Toronto Public Health says that in this city that number is one in three.

 Canadian children are, on average, sedentary for almost two-thirds of their waking hours. As a result, they are at risk for Type II diabetes and cardiovascular disease.

153. As a media company, our fundamental question is what we, and other companies, can do to get the message out in an effective manner. The first element is getting the experts to give us the story line that will be compelling and effective. So we consulted the experts.

154. St. Michael’s Hospital serves the most densely populated inner city in Canada. It is the only hospital in Toronto – and the first in Canada – to have created an Inner City Health Program. Every day, the health care teams reach out to people who are most in need: women-at-risk, people who are homeless, patients with severe and persistent mental illness and, sadly, Toronto’s disadvantaged children.

155. The St. Michael’s Hospital TARGet Kids! program is following over 5,000 children in the Toronto area to determine the common factors that hamper healthy growth and development. If we can understand why health problems

24 develop in childhood, adolescence and into adulthood, we can prevent them. This initiative is unique in Canada.

156. The team of experts has made progress, garnering significant peer review funding support and media attention. But they need help to expand the program and develop the messaging for all Canadians utilizing traditional and new media:

 To enable the TARGet Kids! living laboratory to expand beyond Toronto’s inner city core;  To help to grow the TARGet Kids! registry from 5,000 children to 10,000, making it one of the largest urban cohorts of young children in the world, of whom an estimated one third will become obese and have to cope with the associated effects of chronic illness in adulthood, unless we intervene;

 To broaden our understanding of the child, family and neighbourhood environmental factors that underlies childhood obesity; and

 To use this information to build awareness in the form of media tools to develop and test new health interventions derived from the research aimed at the root causes of childhood obesity to assist primary care physicians, parents, and communities in working together to prevent these problems from the outset. What we are proposing is a form of script development over and above the funds set out above but on this particular subject matter.

157. In sum, the benefits funds will be used to build on this research and develop the knowledge and understanding to help create effective messaging and media tools to help Canadian children, their parents, and institutions to solve this problem.

158. All of the funds will be used by St. Michael’s Hospital to accomplish this objective.

159. All of the information will be shared with the community at large and we hope to involve other media companies as well as independent producers.

160. The program has recently expanded into two other provinces ( and Quebec). The team is collaborating with site leads Dr. Carrie Daymont at the Manitoba Institute of Child Health and Dr. Patricia Li at the Montreal Children’s Hospital Research Institute, who are providing matching financial support. Data collection at those sites is set to begin in 2013.

161. The development of understanding and media tools will facilitate achieving these goals.

25 Financial Impact

162. The benefits monies will be disbursed as follows:

(millions) Recipient Year Year Year Year Year Year Year Total 1 F14 2 F15 3 F16 4 F17 5 F18 6 F19 7 F20 Programming 2.374 2.374 2.374 2.374 2.374 2.374 2.371 $16.615 Script 0.4 0.4 0.4 0.4 0.4 0.4 0.4 $2.800 Export 0.25 0.25 0.25 0.25 0.25 0.25 0.25 $1.750 TAAFI 0.025 0.025 0.025 0.025 0.025 0.025 0.025 $0.175 OAIF 0.025 0.025 0.025 0.025 0.025 0.025 0.025 $0.175 Animaze 0.025 0.025 0.025 0.025 0.025 0.025 0.025 $0.175 TIFF Kids 0.025 0.025 0.025 0.025 0.025 0.025 0.025 $0.175 Banff 0.025 0.025 0.025 0.025 0.025 0.025 0.025 $0.175 DigiFest 0.015 0.015 0.015 0.015 0.015 0.015 0.015 $0.105 CFC 0.075 0.075 0.075 0.075 0.075 0.075 0.05 $0.500 Sheridan 0.04 0.03 0.03 0.03 0.03 0.03 0.03 $0.220 NSI 0.025 0.025 0.025 0.025 0.025 0.025 0.025 $0.175 Mount Royal 0.025 0.025 0.025 0.025 0.025 0.025 0.025 $0.175 Algonquin 0.025 0.025 0.025 0.025 0.025 0.025 0.025 $0.175 UW-Stratford 0 0.015 0.015 0.015 0.015 0.015 0.015 $0.090 YMCA 0 0 0.025 0.025 0.025 0.025 0.025 $0.125 City Life 0 0 0.005 0.005 0.005 0.005 0.005 $0.025 CCA 0 0 0 0.05 0.05 0.05 0.05 $0.200 CICCORI 0.13 0.13 0.13 0.13 0.13 0.13 0.12 $0.900 CCF 0.05 0.05 0.014 0.014 0.014 0.014 0.014 $0.170 Total 3.534 3.539 3.533 3.583 3.583 3.583 3.545 $24.900

163. Corus submits that the benefits package is in the public interest. The proposed benefits package will result in the achievement of significant contributions to the Canadian broadcasting system. The vast majority of the funds will be used to finance the creation of new and innovative Canadian programs. The remaining monies will be used to support key public policy initiatives that advance certain objectives contained in section 3 of the Broadcasting Act including:

3(1)(d)(i) serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada; and (ii) encourage the development of Canadian expression by providing a wide-range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity.

Diversity and Ownership Issues

164. The Commission examines and regulates the subject of diversity in two fundamental areas: program source and ownership.

26 165. The Canadian broadcasting system is more diverse in each of these areas than it has ever been since the first radio station launched in Montreal in the last century. Canadians have a plethora of choice of both Canadian and foreign services. Although today’s Canadian media industry is strong and vibrant, the fundamental business premises of this industry are undergoing major and fundamental changes because of the advent of new media, which offers limitless unregulated media choices and opportunities. It is not only new media that are changing the environment, but also the arrival of foreign services in large numbers that are competing for content, viewers, subscribers and advertisers without any of the obligations that Canadian licensees carry.

166. The number of services authorized to broadcast in Canada continues to grow:8

Type 2007 2011 Analog Specialty 44 49 Category 1 18 18 Category 2 53 110 Pay 13 16 Pay per View 13 11 VOD 18 33 Total 159 237

167. The advent of digital technology represents one of these opportunities by bringing production and distribution tools to all Canadians. However, in doing so digital technology also poses a threat to the existence of Canadian media as we know it. The reality of the Canadian market – small and surrounded by larger media entities – is exacerbated by digital technology which increases fragmentation and removes borders as well as barriers to entry.

168. The Commission set out its policy on ownership diversity in Broadcasting Public Notice CRTC 2008-4. In its policy notice, the Commission outlined how it would deal with applications seeking a change in effective control based on the total television audience share post acquisition. Essentially the Commission undertakes, barring other policy concerns, to “process expeditiously transactions that would result in the control by one person of less than 35% of the total television audience share – including audiences to both discretionary and OTA services.9”

169. In the present case, the total of Corus’ English-speaking audience viewers 2+ shares for each of the periods 2011 are as follows:

8 CRTC Communications Monitoring Reports 2012 and 2008. 9 BPN 2008-4 at paragraph #87.

27 2011 Corus 2011 Joint Venture Total Corus Share Services Services10 10.4% 3.02% 13.44%

170. These Joint Venture figures include the TELETOON group of channels.

171. Corus is a company that is ultimately controlled by the JR Family Trust, which also owns and operates Shaw Communications Inc. and Inc. Corus and Shaw Media are completely separate, however, for the purposes of the Commission’s analysis, below are Shaw Media Inc.’s English audience 2+ shares (English being all of Canada outside French Quebec) for each of the 2011 periods as well as the combined Corus and Shaw audience shares for each of these time periods:

2011 Shaw Services Total Corus/Shaw Share 22.40% 35.83%

172. It is important to note that Corus’ audience share position remains unchanged in the event the Commission approves this transaction. Therefore, there is no increase in English-language share audience position as a result of the proposed transfer. It has already been counted by the Commission.

173. This is the case because Corus already holds a 50% ownership and has actively participated since 1999 through its role on the board of directors of TELETOON Canada Inc. in the operation and stewardship of the TELETOON services. Corus originates the service from its broadcast centre at Corus Quay, sells its advertising inventory nationally (excluding Quebec) and contributes Canadian Content through Nelvana Limited.

174. The Commission also made an important statement in the Diversity Policy:

It is important to note that the Commission will not be concerned about increases in viewing share that result from the normal competition for audiences or the introduction of new services. Concerns are only triggered when a proposed acquisition may result in a person gaining a dominant position in the television sector.11

175. Corus has been an industry leader in launching new television services or rescuing failing brands by making the investment to bring them back to life for Canadian audiences. Some examples of new launches are ABC Spark (launched in 2012), Cartoon Network (2012), Nickelodeon (2009), and TELETOON Retro English and French (2007). Re-branded and rescued services include OWN: Oprah Winfrey Network (from Canadian Learning Television), W Movies (from Sex TV) and Sundance Channel (from Drive In

10 Includes TELETOON. 11 IBID, paragraph #84.

28 Classics). These investments brought more and better Canadian independently produced programming to Canadian homes.

176. So part of our share growth has been due to the introduction of new services and also improving what we do to attract more audience.

177. On the subject of program source, the Canadian regulatory regime already imposes comprehensive obligations on licensees to create a structured market for independent producers.

178. We start with the understanding that a linear channel has a fixed volume of time. Each year starts with a total of 8,760 hours. Each program occupies a portion of that time. The number of individual program titles needed is a function of the repeat factor.

179. The current regulatory structure made up of the Commission rules and funding agencies’ policies combined with tax credit and other rules greatly influence the supply chain for programming.

180. This matrix of regulations and policies has evolved a great deal since the CRTC diversity policy was first announced in 2008. The combined impact of existing conditions of licence (COL), the Group Based Licensing process, and funding agency rules establish the framework for how the 8,760 hours are filled. A Corus service is subject to the following rules which regulate our decision making on programming acquisition and scheduling:

 Canadian Content must meet certain levels overall and in prime viewing periods.

 This Canadian Content volume must meet or exceed a Canadian Program Expenditure (CPE) level.

 Part of the CPE must be devoted to minimum levels of Programming of National Interest (PNI) spending.

 A portion of the PNI CPE must be spent on independent productions.

181. The Terms of Trade Agreement (ToT) also became a COL. The Canadian Media Production Association (CMPA) describes its ambit: 12

The deal applies to the entire life cycle of a show - from first pitch, through to development, production and broadcast on all platforms. Key areas covered by the deal include: Development and Evaluation Licensing Conditions Editorial Control

12 See: http://www.cmpa.ca/business-affairs-production-tools/terms-trade

29 Licence Term Rights Equity Super Licence Fees Producer Tax Credits Timeframe and Administration

182. The various funding agencies such as the Canada Media Fund (CMF) also establish licence fee floors as a pre-condition to funding access.13

183. The combined impact of these rules is to establish the volume of content, the per unit price paid for it, the rights such as repeat factors and platforms that can be associated with this price, and the nature of the party from which it can be acquired. It is a market where the only substantive decision a broadcaster really has is what project is selected and when it will be aired in the calendar year. Even the development process is regulated. All other elements have strict criteria associated with them.

184. TELETOON already acquires more than 75% of the TELETOON Canadian Content from independent producers because the Corus production system is not geared to this level of programming volume. The actual total is about 85%. Most of the programs produced by Corus are also not suitable for the mainly adult audiences of the TELETOON channels.

185. So we won’t be supplying the service in any larger volumes that we do now. As to program choice, show development rests completely with the independent producer. They bring the program ideas to us. The volume, price and rights are basically pro forma so the only substantive decision is the subject matter. If we decide to pick a show, licence fees are governed by ToT and CMF, etc. We can also decide if we want to invest additional equity but again, that is governed by ToT. The audience for TELETOON is the ultimate arbiter of success so renewal decisions are in their hands. If a program gathers an audience, it is renewed.

186. TELETOON has a programming team now and will have one after we acquire the services. However Corus is building a dynamic new management team in Montreal so producers will have the same number of stops to make when they are pitching shows. So this market factor does not change either.

187. Therefore, we will be picking the same volume of independent programs at the same terms as is the case now. The big change will be the increase in spending. Most of the benefits payments will also occur to the independent production community in one way or another.

13 See the CMF Performance Envelope Program Guidelines 2012-2013 for an example at http://www.cmf-fmc.ca/funding-programs/convergent-stream/performance-envelope/

30 The Channels are Different

188. Another fundamental point is that each Corus channel has a unique programming mandate. Each licence issued by the CRTC has a unique Nature of Service (NOS) and programming conditions and/or expectations. This does not change with the transaction. TELETOON and the related channels are restricted to mainly animation services. YTV, Treehouse and Nickelodeon have broader mandates but also varying audience targets as a condition.

189. The result is that the of programs and the volume needed does not change.

Conclusion

190. Corus is a respected and valued contributor to the Canadian broadcasting system. We believe in the superb delivery of compelling programming on all of our broadcasting assets and our role in Canadian animation programming is recognized around the world.

191. We have a demonstrated interest and capability as it relates to operating specialty services and TELETOON specifically. Many of the business activities are already performed by Corus.

192. We have reached a definitive agreement with Bell Media Inc. and approval of the proposed transfer of ownership would eliminate further ambiguity on important assets, which contribute significant expenditures to the creation of Canadian Content.

193. TELETOON’s most recent performance has been uncharacteristically poor, reflecting the uncertainty of its ownership and the challenging economic times. Speedy resolution of the control of these broadcasting assets will provide clarity of purpose and avoid unnecessary further erosion.

194. But more importantly, at this crucial juncture in TELETOON’s history it would no longer be appropriate to have the services continue with dual ownership and with the control resting with the board of directors. With the rapid changes being experienced within the Canadian broadcasting industry as a result of digital migration, independent services such as TELETOON will find it increasingly difficult to continue to grow and sustain current levels of CPE without the aid and support of operating within a larger and financially strong media group. Corus is ready, willing and able to invest in the continued success of TELETOON.

31 Timing of the CRTC Review of this Application

195. Corus and Bell-Astral request that this transaction be processed in a manner so that we could effect a simultaneous closing with the Bell and Astral closing. The Commission has a number of options in this regard. The application could be heard at the same public hearing as for the larger transaction between Bell and Astral. It could be a non-appearing item on the same public hearing or the Commission could proceed by way of a Public Notice of Consultation. We request this on the basis of a number of compelling factors:

A. Delay of the closing of this transaction would create an anomalous business and operational circumstance. This would result in a manifestly unfair and confusing circumstance for all concerned, including the CRTC.

 In the event that Bell’s application is approved, it would move forward with its plans to integrate Astral. We would face a situation where Bell and Astral would need to adapt their plan to another event – the Corus purchase approval or a denial – that would take place only months later.

 This places unnecessary stress and risk upon the people and business operations of these five channels. They not only would remain uncertain but one side of the array of services would be making plans for a new vision and structure while being required to continue its efforts for TELETOON. It would certainly be a confusing situation.

 This jeopardizes the efforts of TELETOON to serve its subscribers, viewers and customers (BDU carriers and advertisers) in the manner in which they expect.

 Corus, as a 50% owner, would also face this long period of uncertainty in a business environment that is evolving quickly. The delay would effectively place any required investment decisions in programming and other needs on hold for an entire fiscal year.

 The delay would also push back the comprehensive plans we have for the tangible and intangible benefits to the system. This removes over $3.5 million from the system for a year.

 It would also require a full range of changes to the operation (operating service contacts, etc.) and governance (e.g. board seats, signatories to service agreements etc.) of the operation all of which would change again months later. As noted above, Astral performs key operating tasks for the company. The fact is that Astral, as a corporate entity, with whom are all of the existing service agreements, would cease to exist.

32  A delay would hinder our efforts to build a strong Quebec-based team due to the uncertainty. It would also be extremely difficult for the existing employees who would face a long period of uncertainty.

 As a practical matter, the distraction and demise of Astral would mean that effective control would be passing to Corus in any case but without the legal ability to move on it. In short, the five channels would sit in limbo for months.

B. The Commission’s ability to do a comprehensive review would not be constrained.

 TELETOON filed its licence renewal application in September 2012 and the Commission has completed its review.

 The Commission has just recently reviewed and approved the Corus plan for its other services as part of the Group Based Licensing process which decision was published less than two broadcast years ago in July 2011.

 TELETOON was part of the assets reviewed by CRTC in the original application by Bell and Astral just months ago.

 Corus is not requesting any fundamental changes from the TELETOON obligations and framework of conditions of licence that it filed in its renewal application.

 TELETOON assets will be reviewed by the Commission as part of the Bell-Astral review in every case.

 The Commission already approved the Corus involvement with TELETOON in 2000.

As a result the Commission has a comprehensive understanding of TELETOON and Corus.

C. The Commission will be required to review and approve the disposition of TELETOON as part of the Bell-Astral review process.

 A key aspect of this public hearing process is that the public will have the opportunity to understand and comment upon the disposition of the assets that are going to Corus as part of the Bell-Astral hearing.

D. The only issues for review on the Corus application are our vision for the assets, valuation, and benefits. The Commission will already have approved the disposition by Bell.

33 196. In sum, the Commission will be reviewing the assets in any case as part of the broader transaction; it knows the purchaser Corus and the delay will have significant impacts which could greatly damage the assets in question.

197. We respectfully submit that review and approval of this application as part of the Bell-Astral process would be significantly in the public interest.

34 Appendix A Review of Corus Awards and Milestones

February 19, 2013: Corus Named One of Canada’s Best Diversity Employers for 2012 The Company announced that, for the fifth year in a row, Corus Entertainment was named one of Canada’s Best Diversity Employers for 2013 by Canada Inc.

February 6, 2013: Corus Recognized at the IR Magazine Canada 2012 Awards The Company was recognized for the second year in a row with the prestigious IR Magazine Canada 2013 award for Best Investor Relations by Sector - Leisure and Media.

November 20, 2012: Corus Entertainment Named One of Greater Toronto's Top Employers for 2013 Corus Entertainment was named one of Greater Toronto's Top Employers for 2013. This special designation recognizes Greater Toronto employers that lead their industries in offering exceptional places to work.

November 13, 2012: Kids Can Press Wins 2012 Governor General’s Literary Award for Virginia Wolf The Company’s Kids Can Press won the 2012 Governor General’s Literary Award for Children's Literature – Illustration for Isabelle Arsenault’s Virginia Wolf. This is the fifth Governor General’s Literary Award that Kids Can Press has received.

October 9, 2012: Toon Boom Storyboard Pro Wins a Primetime Engineering Emmy® The Company's subsidiary, Toon Boom, announced that the Academy of Television Arts and Sciences had awarded a 2012 Primetime Engineering Emmy® Award to Storyboard Pro, Toon Boom's flagship storyboarding software. These awards honour significantly improved or innovative engineering developments that materially affect the television medium.

September 23, 2012: Corus’ Programming Recognized at the 64th Primetime Emmy® Awards The Company announced that its programming received 24 awards at the 64th Primetime Emmy® Awards. The award-winning series included HBO’s , Game Change, , Curb Your Enthusiasm, Girls and as well as Nickelodeon’s The Penguins of Madagascar: The Return of the Revenge of Dr. Blowhole.

April 20, 2012: Corus Named one of Canada’s Greenest Employers for 2012 The Company was named one of Canada’s Greenest Employers for 2012 by Mediacorp Canada Inc. Selected alongside 54 other companies, this award recognizes employers that create a culture of environmental awareness in their organizations.

35 March 22, 2012: Corus Wins Three 2012 Canadian Music & Broadcast Industry Awards The Company won three 2012 Canadian Music & Broadcast Industry Awards including: Station of the Year (Country), Country 105, Calgary; Station of the Year (Rock), 102.1 the Edge, Toronto; and Program Director of the Year (Medium Market), Brad Gibb, FM 96, London.

March 22, 2012: John Derringer Inducted into the Canadian Industry Hall of Fame The Company’s morning show host on Q107 Toronto, John Derringer, received the Allan Waters Broadcast Lifetime Achievement Award and was inducted into the Canadian Broadcast Industry Hall of Fame.

March 7, 2012: CKNW AM 980 Receives Three 2012 RTNDA Awards The Company’s CKNW AM 980 was honoured with three 2012 RTNDA Canada Awards including the Sam Ross Award for Editorial/Commentary, the Dave Rogers Award for Long Feature and the Ron Laidlaw Award for Continuing Coverage.

February 21, 2012: Corus Named One of Canada’s Best Diversity Employers for 2012 The Company announced that, for the fourth year in a row, Corus Entertainment was named one of Canada’s Best Diversity Employers for 2012 by Mediacorp Canada Inc.

February 2, 2012: Corus Recognized with two IR Magazine Canada 2012 Awards The Company was recognized with two prestigious IR Magazine Canada 2012 awards including Best Investor Relations by Sector - Leisure and Media and Best Investor Relations by a CFO (Tom Peddie) for a mid-cap company.

December 6, 2011: Corus Honoured with Canada’s Outstanding Employer Award for 2011 The Company was honoured with The Learning Partnership’s 2011 Canada’s Outstanding Employer Award for its Take Our Kids to Work™ program.

November 15, 2011: Kids Can Press Wins Governor General’s Literary Award for Cybèle Young’s Ten Birds The Company’s Kids Can Press won the 2011 Governor General’s Literary Award for Children's Literature – Illustration for Cybèle Young’s Ten Birds. This is the fourth Governor General’s Literary Award that Kids Can Press has received in the last five years.

September 19, 2011: Corus Named One of Canada’s Top Employers for Young People for 2011 Corus Entertainment was named one of Canada’s Top Employers for Young People for 2011, which marks the second year in a row that Corus received special recognition in attracting and training younger employees through Corus U’s in- house and online training opportunities.

36 September 8, 2011: Corus Receives 23 The Company announced that its programming received a total of 23 awards from the Academy of Canadian Cinema and Television’s 26th Annual Gemini Awards. Movie Central’s series received a total of 17 awards, with Call Me Fitz picking up an impressive seven Geminis. Corus’ YTV and TELETOON received six awards, including two Geminis for Nelvana Studio’s Babar and the Adventures of Badou.

37 APPENDIX 2B Control Statement Appendix 2B Statement of Control

The proposed licensee 8324441 Canada Inc. is 100% controlled by Corus Entertainment Inc. APPENDIX 2C Corporate Documents

Corporations Canada Corporations Canada 2013-03-01 9th floor, Jean Edmonds Towers South 9e étage, Tour Jean-Edmonds sud 365 Laurier Avenue West 365, avenue Laurier ouest Ottawa, Ontario K1A 0C8 Ottawa (Ontario) K1A 0C8

Corporation Information Sheet Fiche de renseignements concernant la société Canada Business Corporations Act (CBCA) Loi canadienne sur les sociétés par actions (LCSA)

8324441 Canada Inc.

Corporation Number 832444-1 Numéro de société Corporation Key Clé de société Required for changes of 87705178 Requise pour mettre à jour en ligne l'adresse du siège address or directors online social ou l'information concernant les administrateurs Anniversary Date 03-01 Date anniversaire Required to file annual return (mm-dd/mm-jj) Requise pour le dépôt du rapport annuel Annual Return Filing Period 03-01 to/au 04-30 Période pour déposer le rapport annuel Starting in 2014 (mm-dd/mm-jj) Débutant en 2014

Reporting Obligations Obligations de déclaration A corporation can be dissolved if it defaults in filing a document Une société peut être dissoute si elle omet de déposer un required by the CBCA. To understand the corporation's reporting document requis par la LCSA. Pour connaître les obligations de obligations, consult Keeping Your Corporation in Good Standing déclaration de la société veuillez consulter la brochure Maintenir (enclosed or available on our website). votre société en conformité, ci-jointe ou disponible dans notre site Web.

Corporate Name Dénomination sociale Where a name has been approved, be aware that the corporation En dépit du fait que Corporations Canada ait approuvé la assumes full responsibility for any risk of confusion with existing dénomination sociale, il faut savoir que la société assume toute business names and trademarks (including those set out in the responsabilité de risque de confusion avec toutes dénominations NUANS® search report). The corporation may be required to change commerciales, marques de commerce existantes (y compris celles its name in the event that representations are made to Corporations qui sont citées dans le rapport de recherche NUANSMD). La société Canada and it is established that confusion is likely to occur. Also devra peut-être changer sa dénomination advenant le cas où des note that any name granted is subject to the laws of the jurisdiction représentations soient faites auprès de Corporations Canada where the corporation carries on business. For additional établissant qu'il existe une probabilité de confusion. Il faut aussi information, consult Protecting Your Corporate Name (enclosed noter que toute dénomination octroyée est assujettie aux lois de or available on our website). l'autorité législative où la société mène ses activités. Pour obtenir de l'information supplémentaire, veuillez consulter le document Protection de la dénomination sociale ci-joint ou disponible dans notre site Web.

Telephone / Téléphone Email / Courriel Website / Site Web 1-866-333-5556 [email protected] www.corporationscanada.ic.gc.ca

Certificate of Incorporation Certificat de constitution Canada Business Corporations Act Loi canadienne sur les sociétés par actions

8324441 Canada Inc.

Corporate name / Dénomination sociale

832444-1 Corporation number / Numéro de société

I HEREBY CERTIFY that the above-named JE CERTIFIE que la société susmentionnée, dont corporation, the articles of incorporation of which les statuts constitutifs sont joints, est constituée are attached, is incorporated under the Canada en vertu de la Loi canadienne sur les sociétés par Business Corporations Act. actions.

Marcie Girouard Director / Directeur 2013-03-01 Date of Incorporation (YYYY-MM-DD) Date de constitution (AAAA-MM-JJ)

Form 1 Formulaire 1 Articles of Incorporation Statuts constitutifs Canada Business Corporations Loi canadienne sur les sociétés Act (s. 6) par actions (art. 6)

1 Corporate name Dénomination sociale 8324441 Canada Inc. 2 or territory in Canada where the registered office is situated La province ou le territoire au Canada où est situé le siège social ON 3 The classes and any maximum number of shares that the corporation is authorized to issue Catégories et le nombre maximal d’actions que la société est autorisée à émettre an unlimited number of common shares. 4 Restrictions on share transfers Restrictions sur le transfert des actions See attached schedule / Voir l’annexe ci-jointe 5 Minimum and maximum number of directors Nombre minimal et maximal d’administrateurs Min. 1 Max. 10 6 Restrictions on the business the corporation may carry on Limites imposées à l’activité commerciale de la société None 7 Other Provisions Autres dispositions See attached schedule / Voir l’annexe ci-jointe 8 Incorporator’s Declaration: I hereby certify that I am authorized to sign and submit this form. Déclaration des fondateurs : J’atteste que je suis autorisé à signer et à soumettre le présent formulaire. Name(s) - Nom(s) Original Signed by - Original signé par

Thomas C. Peddie Thomas C. Peddie Thomas C. Peddie

Misrepresentation constitutes an offence and, on summary conviction, a person is liable to a fine not exceeding $5000 or to imprisonment for a term not exceeding six months or both (subsection 250(1) of the CBCA).

Faire une fausse déclaration constitue une infraction et son auteur, sur déclaration de culpabilité par procédure sommaire, est passible d’une amende maximale de 5 000 $ et d’un emprisonnement maximal de six mois, ou l’une de ces peines (paragraphe 250(1) de la LCSA).

You are providing information required by the CBCA. Note that both the CBCA and the Privacy Act allow this information to be disclosed to the public. It will be stored in personal information bank number IC/PPU-049.

Vous fournissez des renseignements exigés par la LCSA. Il est à noter que la LCSA et la Loi sur les renseignements personnels permettent que de tels renseignements soient divulgués au public. Ils seront stockés dans la banque de renseignements personnels numéro IC/PPU-049.

IC 3419 (2008/04)

Schedule / Annexe Restrictions on Share Transfers / Restriction sur le transfert d'actions The shares of the Corporation shall be subject to the restriction on the transfer of securities set out under Other provisions, if any.

Schedule / Annexe Other Provisions / Autres dispositions

(a) The securities of the Corporation, other than non-convertible debt securities, shall not be transferred without the approval of the board of directors or of the holder or holders of more than 50% of the voting shares of the Corporation, to be evidenced in either case by a resolution of such directors or shareholders.

(b) The directors may appoint from time to time one or more additional directors within the limits provided in the Canada Business Corporations Act.

(c) The directors may from time to time determine the number of directors of the Corporation.

Form 2 Formulaire 2 Initial Registered Office Address Siège social initial et premier and First Board of Directors conseil d’administration Canada Business Corporations Act Loi canadienne sur les sociétés par (CBCA) (s. 19 and 106) actions (LCSA) (art. 19 et 106)

1 Corporate name Dénomination sociale 8324441 Canada Inc.

2 Address of registered office Adresse du siège social 25 Dockside Drive Toronto ON M5A 0B5

3 Additional address Autre adresse

4 Members of the board of directors Membres du conseil d’administration Resident Canadian Résident Canadien Thomas C. Peddie 25 Dockside Drive, Toronto ON Yes / Oui M5A 0B5, Canada

5 Declaration: I certify that I have relevant knowledge and that I am authorized to sign this form. Déclaration : J’atteste que je possède une connaissance suffisante et que je suis autorisé(e) à signer le présent formulaire.

Original signed by / Original signé par Thomas C. Peddie

Thomas C. Peddie 416-479-7000

Misrepresentation constitutes an offence and, on summary conviction, a person is liable to a fine not exceeding $5000 or to imprisonment for a term not exceeding six months or both (subsection 250(1) of the CBCA).

Faire une fausse déclaration constitue une infraction et son auteur, sur déclaration de culpabilité par procédure sommaire, est passible d’une amende maximale de 5 000 $ et d’un emprisonnement maximal de six mois, ou l’une de ces peines (paragraphe 250(1) de la LCSA).

You are providing information required by the CBCA. Note that both the CBCA and the Privacy Act allow this information to be disclosed to the public. It will be stored in personal information bank number IC/PPU-049.

Vous fournissez des renseignements exigés par la LCSA. Il est à noter que la LCSA et la Loi sur les renseignements personnels permettent que de tels renseignements soient divulgués au public. Ils seront stockés dans la banque de renseignements personnels numéro IC/PPU-049.

IC 2904 (2008/04)

Corporations Canada Corporations Canada 9th floor 9e étage Jean Edmonds Towers South Tour Jean Edmonds sud 365 Laurier Avenue West 365, avenue Laurier ouest Ottawa, Ontario K1A 0C8 Ottawa (Ontario) K1A 0C8

2013-03-01

Ontario Extra-provincial Registration / L’enregistrement d’une entreprise extraprovinciale en Ontario

8324441 Canada Inc. Corporate name / Dénomination sociale

832444-1 Corporation Number / Numéro de la société

Attached is your completed registration form for Ci-joint est votre formulaire d’enregistrement Ontario. The form does not contain your Ontario rempli pour l’Ontario. Le formulaire ne contient Corporation Number. pas votre numéro d’entreprise de l’Ontario.

The Ontario registration application has been La demande d’enregistrement de l’Ontario a été forwarded to the Ontario Central Production and envoyée à la Direction des services centraux de Verification Services Branch. If your application is production et de vérification. Si votre demande est approved, you will receive a "Notice to Clients" approuvée, vous recevrez un « préavis des clients advising you of the corporation's new Ontario » vous informant du nouveau numéro d’entreprise Corporation Number. de l’Ontario pour la société.

If you have any questions about your Ontario registration, contact Central Production and Si vous avez des questions au sujet de Verification Services Branch at: l’enregistrement en Ontario, contactez la 1-800-361-3223 or 416-314-8880 or Direction des services centraux de production et www.ontario.ca/en/business/STEL02_163367. de vérification : 1-800-361-3223 ou 416-314-8880 ou www.ontario.ca/fr/business/STEL02_164570.

INITIAL RETURN/ RAPPORT INITIAL FORM 2 - EXTRA PROVINCIAL CORPORATIONS/ Corporations Information Act/ FORMULE 2 - PERSONNES MORALES EXTRA-PROVINCIALES Loi sur les renseignements exigés des personnes morales

For Ministry Use Only 2. Ontario Corporation Number 3. Date of Incorporation 1. Initial Return À l'usage du ministère Numéro matricule de la personne Date de constitution Rapport initial seulement morale en Ontario Business Corporations/ X 2013-03-01 Société par actions

4. Corporation Name Including Punctuation/Raison sociale de la personne morale, y compris la ponctuation For Ministry Use Only À l'usage du ministère seulement 8324441 Canada Inc.

5. Address of Registered or Head Office/Adresse du siège social For Ministry Use Only À l'usage du ministère seulement 25 Dockside Drive Toronto, Ontario Canada M5A 0B5

6. Address of Principal Office in Ontario/Adresse du bureau principal en Ontario Not Applicable/Ne s'applique pas 25 Dockside Drive Toronto, Ontario Canada M5A 0B5

7. Language of Preference/Langue préférée X English/Anglais French/Français

8. Former Corporation Name/Raison sociale antérieure de la personne morale X Not Applicable/Ne s'applique pas

9. Date commenced business activity in Ontario/Date de début des activités en Ontario 2013-03-01

10. Date ceased carrying on business activity in Ontario/Date de cessation des activités en Ontario X Not Applicable/Ne s'applique pas

11. Jurisdiction of Incorporation/Amalgamation or Continuation/Ressort de constitution/de fusion ou prorogation X Canada/Canada

12. Name and Office Address of the Chief Officer/Manager in Ontario/Nom et adresse du bureau du directeur général/gérant en Ontario

X Not Applicable/Ne s'applique pas Date Effective/Date d'entrée en vigueur

13. Name and Office Address of Agent for Service in Ontario/Nom et adresse du bureau du mandataire aux fins de signification en Ontario

X Not Applicable/Ne s'applique pas

14. Name/Nom Person authorizing filing/Personne qui autorise l'enregistrement Thomas C. Peddie Director

NOTE/ Sections 13 and 14 of the Corporations Information Act provide penalties for making false or misleading statements or omissions. REMARQUE: Les articles 13 et 14 de la Loi sur les renseignements exigés des personnes morales prévoient des peines en cas de déclaration fausse ou trompeuse, ou d'omission.

This information is being collected under the authority of The Corporations Information Act for the purpose of maintaining a public data base of corporate information. La Loi sur les renseignements exigés des personnes morales autorise la collecte de ces renseignements pour constituer une banque de données accessible au public. APPENDIX 2D Share Purchase Agreement ABRIDGED ABRIDGED

EXECUTION VERSION

BELL MEDIA INC.

- and -

8324441 CANADA INC.

- and -

CORUS ENTERTAINMENT INC.

______

SHARE PURCHASE AGREEMENT

March 4, 2013

______ABRIDGED

TABLE OF CONTENTS

Page

ARTICLE 1 DEFINITIONS AND PRINCIPLES OF INTERPRETATION ...... 2

1.1 Definitions ...... 2 1.2 Certain Rules of Interpretation ...... 10 1.3 Knowledge...... 12 1.4 Entire Agreement...... 12

ARTICLE 2 PURCHASE AND SALE...... 12

2.1 Action by Bell and Purchaser ...... 12 2.2 Place of Closing...... 13 2.3 Allocation of Purchase Price ...... 13

ARTICLE 3 PURCHASE PRICE...... 14

3.1 Purchase Price ...... 14 3.2 Satisfaction of Purchase Price ...... 14 3.3 Delivery of Closing Date Balance Sheet ...... 14 3.4 Post-Closing Adjustment...... 16

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BELL ...... 16

4.1 Residence of Bell...... 17 4.2 Status of Bell and Right to Sell ...... 17 4.3 Capitalization...... 17 4.4 Due Authorization and Enforceability of Obligations...... 18 4.5 Absence of Conflicts ...... 18 4.6 Regulatory Approvals...... 18 4.7 Litigation ...... 19 4.8 Benefit Plans...... 19 4.9 Business of HoldCo...... 20 4.10 Business of HoldCo 2...... 20 4.11 Third Party Consents ...... 20 4.12 Independence of Parties...... 20 4.13 No Broker ...... 20

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER...... 20

5.1 Status of the Purchaser ...... 21 5.2 Due Authorization and Enforceability of Obligations...... 21 5.3 Absence of Conflicts ...... 21

-i- ABRIDGED

TABLE OF CONTENTS (continued) Page

5.4 Litigation ...... 21 5.5 No Broker ...... 22 5.6 Share Ownership ...... 22 5.7 No Partner...... 23 5.8 Qualified Corporation...... 23 5.9 Independence of Parties...... 23 5.10 Continued Operation of the Business of the Company ...... 23

ARTICLE 6 SURVIVAL...... 24

6.1 Nature and Survival...... 24

ARTICLE 7 PURCHASER’S CONDITIONS PRECEDENT...... 24

7.1 Truth and Accuracy of Representations of Bell at the Closing Time...... 24 7.2 Performance of Obligations...... 24 7.3 Receipt of Closing Documentation ...... 25 7.4 No Proceedings...... 25 7.5 CRTC Approval and Competition Act Approval...... 25 7.6 Astral Arrangement ...... 25 7.7 Termination of Pension Plan Participation...... 25

ARTICLE 8 BELL’S CONDITIONS PRECEDENT ...... 26

8.1 Truth and Accuracy of Representations of the Purchaser at Closing Time...... 26 8.2 Performance of Obligations...... 26 8.3 Receipt of Closing Documentation ...... 26 8.4 No Proceedings...... 27 8.5 CRTC Approval and Competition Act Approval...... 27 8.6 Astral Arrangement ...... 27

ARTICLE 9 OTHER COVENANTS OF THE PARTIES...... 27

9.1 Conduct of Business Prior to Astral Closing...... 27 9.2 Conduct of Business After the Astral Closing...... 28 9.3 Actions to Satisfy Closing Conditions ...... 28 9.4 Preservation of Records...... 29 9.5 Regulatory Approvals...... 29 9.6 Benefit Plans...... 33 9.7 Pension Plans...... 34 9.8 Restriction on Sale...... 35 9.9 Waiver of Rights of First Refusal...... 35 9.10 Confidentiality...... 36 9.11 [Redacted]...... 36

-ii- ABRIDGED

TABLE OF CONTENTS (continued) Page

9.12 Cash Distribution...... 37 9.13 Books and Records ...... 37 9.14 Notice of Untrue Representation or Warranty...... 37 9.15 Cooperation regarding reorganization...... 38 9.16 Termination and Mutual Release Agreement...... 39 9.17 Section 256(9) Election ...... 39

ARTICLE 10 INDEMNIFICATION ...... 40

10.1 Indemnification by Bell...... 40 10.2 Indemnification by the Purchaser...... 42 10.3 Indemnification Procedures for Third Party Claims...... 44 10.4 Tax Status of Indemnification Payments...... 45 10.5 Additional Limitations...... 45 10.6 Exclusive Remedy...... 45

ARTICLE 11 TERMINATION ...... 46

11.1 Termination ...... 46 11.2 Effect of Termination ...... 47 11.3 [Redacted]...... 48 11.4 Indemnity Payment...... 48

ARTICLE 12 GENERAL...... 50

12.1 Public Notices...... 50 12.2 Expenses ...... 50 12.3 Notices...... 50 12.4 Assignment ...... 52 12.5 Enurement...... 52 12.6 Amendment ...... 52 12.7 Further Assurances ...... 52 12.8 Submission to Jurisdiction...... 52 12.9 Execution and Delivery ...... 53 12.10 Guarantee by Purchaser Parent...... 53

-iii- ABRIDGED

TABLE OF CONTENTS (continued) Page

EXHIBITS AND SCHEDULES Exhibit A – Company Shares and HoldCo Shares Schedule 3.3(a) – Sample Calculation of Closing Working Capital Schedule 4.8(a) – Benefit Plans Schedule 5.6 – Share Ownership

-iv- ABRIDGED

THIS SHARE PURCHASE AGREEMENT is made as of March 4, 2013

BY AND AMONG:

BELL MEDIA INC., a corporation governed by the laws of Canada,

(“Bell”)

- and -

8324441 CANADA INC., a corporation governed by the laws of Canada,

(the “Purchaser”)

- and -

CORUS ENTERTAINMENT INC., a corporation governed by the laws of Canada;

(“Purchaser Parent”)

RECITALS:

A. BCE Inc. (“BCE”) and Astral Media Inc. (“Astral”) entered into an arrangement agreement dated March 16, 2012, as amended on November 19, 2012 (the “BCE-Astral Agreement”), pursuant to which BCE agreed to acquire all of the issued and outstanding shares of Astral by way of plan of arrangement;

B. Upon the consummation of the transactions contemplated by the BCE-Astral Agreement and certain reorganizations to be completed in the context of the Astral Arrangement, Bell will (i) beneficially own and control certain of the issued and outstanding shares of TELETOON Canada Inc., a corporation governed by the laws of Canada (the “Company”) as set forth on Exhibit A (the “Company Shares”), and (ii) beneficially own and control certain of the issued and outstanding shares of 4116381 Canada Inc., a ABRIDGED - 2 -

corporation governed by the laws of Canada (“HoldCo”) as set forth on Exhibit A (the “HoldCo Shares”);

C. HoldCo beneficially owns and controls all of the outstanding shares of 4113756 Canada Inc. (“HoldCo 2”), which in turn beneficially owns and controls certain of the issued and outstanding shares of the Company, each as set forth on Exhibit A;

D. It is anticipated that as a condition to the closing of the Astral Arrangement, the interests that Bell will have in HoldCo and the Company following the Astral Arrangement are to be divested in order to comply with CRTC regulations and policies and/or obtain approval under the Competition Act; and

F. Bell has agreed to sell to the Purchaser and the Purchaser has agreed to purchase from Bell the Company Shares and the HoldCo Shares on the terms and conditions of this Agreement.

THEREFORE, the Parties agree as follows:

ARTICLE 1 DEFINITIONS AND PRINCIPLES OF INTERPRETATION

1.1 Definitions

Whenever used in this Agreement, the following words and terms have the meanings set out below:

“Affiliate” of any Person means, at the time such determination is being made, any other Person controlling, controlled by or under common control with such first Person, in each case, whether directly or indirectly, and “control” and any derivation thereof means the possession, directly or indirectly, of the power to direct the management and policies/business or affairs of a Person whether through the ownership of voting securities or otherwise; provided, that with respect to the Purchaser and Purchaser Parent, the term Affiliates shall not include any Person other than Purchaser Parent and any Person controlled, directly or indirectly, by Purchaser Parent; ABRIDGED - 3 -

“Agreement” means this Share Purchase Agreement, including all amendments or restatements, as permitted, and references to “Article” or “Section” mean the specified Article or Section of this Agreement;

“Astral” has the meaning given in the Recitals;

“Astral Arrangement” means the plan of arrangement transaction contemplated by the BCE-Astral Agreement;

“Astral Benefit Plan” means the Benefit Plans sponsored or maintained by Astral and/or its Affiliates;

“Astral Pension Plan” means the Pension Plan(s) sponsored or maintained by Astral and/or its Affiliates and in which the Company and its employees participate;

“BCE” has the meaning given in the Recitals;

“BCE-Astral Agreement” has the meaning given in the Recitals;

“BCE Trust Arrangements” means the arrangements whereby the Company Shares and/or the HoldCo Shares (directly or indirectly) to be acquired by BCE under the Astral Arrangement may be deposited with the BCE Trustee, following the closing of the Astral Arrangement pursuant to a voting trust agreement pending the sale of the Company Shares and HoldCo Shares pursuant to the terms of this Agreement, if the Astral Arrangement is completed and such voting trust arrangements are required to be entered into pursuant to and approved in connection with any regulatory approval for the Astral Arrangement;

“BCE Trustee” means the person who has the power to exercise the voting rights attaching to the Company Shares and HoldCo Shares following the closing of the Astral Arrangement pursuant to the BCE Trust Arrangements;

“Bell” has the meaning given in the Preamble;

“Bell Indemnified Parties” has the meaning given in Section 10.2(a); ABRIDGED - 4 -

“Benefit Plans” means plans, arrangements, agreements, programs, policies, practices or undertakings, whether oral or written, formal or informal, funded or unfunded, insured or uninsured, registered or unregistered to which the Company is a party or bound or in which the employees of the Company participate or under which the Company has, or will have, any liability or contingent liability, or pursuant to which payments are made, or benefits are provided to, or an entitlement to payments or benefits may arise with respect to any of the employees or former employees of the Company, directors or officers, individuals working on contract with the Company or other individuals providing services to the Company of a kind normally provided by employees (or any spouses, dependants, survivors or beneficiaries of any such persons), excluding any Statutory Plans;

“Books and Records” means books and records of a Person, including financial, corporate, operations and sales books, records, books of account, sales and purchase records, lists of suppliers and customers, formulae, business reports, plans and projections and all other documents, surveys, plans, files, records, assessments, correspondence, and other data and information, financial or otherwise, including all data, information and databases stored on computer-related or other electronic media;

“Business Day” means any day, other than a Saturday or Sunday, on which banks in Toronto, Ontario and in Montreal, Québec are open for commercial banking business during normal banking hours;

“Channels” means Teletoon English and French, Teletoon Retro and Teletoon Rétro, and Cartoon Network;

“Claims” includes claims, demands, complaints, grievances, actions, applications, suits, causes of action, Orders, charges, indictments, prosecutions, informations or other similar processes, assessments or reassessments, judgments, debts, liabilities, penalties, fines, expenses, costs, damages or losses, contingent or otherwise, whether liquidated or unliquidated, matured or unmatured, disputed or undisputed, contractual, legal or equitable, including loss of value, professional fees, including fees and disbursements of legal counsel on a full indemnity basis, and all costs incurred in investigating or pursuing any of the foregoing or any proceeding relating to any of the foregoing; ABRIDGED - 5 -

“Closing” means the completion of the sale to and purchase by the Purchaser of the Purchased Shares under this Agreement;

“Closing Date” means the fifth Business Day after the last of the conditions to the obligations of the Parties as set forth in ARTICLE 7 and ARTICLE 8 is satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions);

“Closing Date Balance Sheet” has the meaning given in Section 3.3(a);

“Closing Time” means 10:00 a.m. (Toronto time), on the Closing Date or such other time on the Closing Date as the Parties may agree in writing as the time at which the Closing shall take place;

“Closing Working Capital” means the amount of Working Capital for the Company as of the time that is immediately prior to the Closing Time;

“Commissioner of Competition” means the Commissioner of Competition appointed pursuant to the Competition Act or any Person duly authorized to exercise the powers of the Commissioner of Competition;

“Company” has the meaning given in the Recitals;

“Company Shares” has the meaning given in the Recitals;

“Competition Act” means the Competition Act (Canada) and the regulations promulgated thereunder;

“Competition Act Approval” means (a) in the event that the sale of the Company Shares or the HoldCo Shares is notifiable pursuant to Part IX of the Competition Act (i) the issuance of an Advance Ruling Certificate with respect to the purchase and sale of the Company Shares and the HoldCo Shares; (ii) notice under section 114 of the Competition Act with respect to the purchase and sale of the Company Shares and the Holdco Shares has been given and the applicable waiting period under section 123 of the Competition Act has expired or has been terminated early in accordance with the Competition Act; or (iii) the obligation to give the requisite notice with respect to the purchase and sale of the ABRIDGED - 6 -

Company Shares and the HoldCo Shares has been waived pursuant to subsection 113(c) of the Competition Act; and (b) the purchase and sale of the Company Shares and the Holdco Shares in accordance with this Agreement has been approved by the Commissioner of Competition pursuant to the terms of any Consent Agreement;

“Competition Tribunal” means the Competition Tribunal established under the Competition Tribunal Act (Canada);

“Consent Agreement” means any agreement between Bell and the Commissioner of Competition in relation to the Astral Arrangement that is registered with the Competition Tribunal;

“Contemplated Reorganization Transaction” has the meaning given in Section 9.15(a);

“Contracts” means contracts, licences, leases, agreements, obligations, promises, undertakings, understandings, arrangements, documents, commitments, entitlements or engagements to which a Person is a party or by which it is bound or under which a Person has, or will have, any liability or contingent liability (in each case, whether written or oral, express or implied), and includes any quotations, orders, proposals or tenders which remain open for acceptance and warranties and guarantees;

“CRTC” means the Canadian Radio-television and Telecommunications Commission or any successor body thereto;

“CRTC Approval” means the approval by the CRTC of the transfer of the Company Shares and the HoldCo Shares to the Purchaser;

“Encumbrances” means pledges, liens, charges, security interests, leases, title retention agreements, mortgages, restrictions, easements, rights-of-way, title defects, options or adverse claims or encumbrances of any kind or character whatsoever;

“Family” means The Family Channel Inc.;

“Final Closing Statement” means the final statement of Closing Working Capital as determined pursuant to Section 3.3(e); ABRIDGED - 7 -

“Final Closing Working Capital” means the Closing Working Capital as set forth on the Final Closing Statement;

“GAAP” means generally accepted accounting principles from time to time approved by the Canadian Institute of Chartered Accountants, or any successor institute, applicable as at the date on which any calculation or determination is required to be made;

“Governmental Authority” means any federal, provincial, state, territorial, regional, municipal or local government or authority, other political subdivision thereof or stock exchange and any entity or Person having jurisdiction exercising executive, judicial, legislative, regulatory or administrative functions of, or pertaining to, government;

“Governmental Authorizations” means authorizations, approvals, franchises, Orders, certificates, consents, directives, notices, licences, permits, agreements, instructions, registrations or other rights issued to or required by a Person by or from any Governmental Authority;

“HoldCo” has the meaning given in the Recitals;

“HoldCo 2” has the meaning given in the Recitals;

“HoldCo Shares” has the meaning given in the Recitals;

“Indemnified Party” has the meaning given in Section 10.3(a);

“Indemnifying Party” has the meaning given in Section 10.3(a);

“Laws” means applicable laws (including common law and civil law), statutes, by-laws, rules, regulations, Orders, ordinances, protocols, codes, guidelines, treaties, policies, notices, or requirements, in each case of any Governmental Authority;

“Multi-Employer Plans” means Benefit Plans to which the Company is required to contribute pursuant to a collective agreement and which are not maintained or administered by the Company or its Affiliates; ABRIDGED - 8 -

“Neutral Auditor” means PricewaterhouseCoopers, or such other nationally recognized auditing firm as the Parties may agree in writing, or if the Parties cannot agree, such other nationally recognized auditing firm as appointed by a court of competent jurisdiction;

“NewHoldCo” has the meaning given in Section 9.15(a);

“Notice” has the meaning given in Section 12.3;

“Notice of Acceptance” has the meaning given in Section 3.3(b);

“Objection Deadline Date” has the meaning given in Section 3.3(b);

“Objection Notice” has the meaning given in Section 3.3(b);

“Orders” means orders, injunctions, judgments, administrative complaints, decrees, rulings, awards, assessments, directions, instructions, penalties or sanctions issued, filed or imposed by any Governmental Authority or arbitrator;

“Outside Date” has the meaning given in Section 11.1(b);

“Parties” means Bell and the Purchaser collectively, and “Party” means any one of them;

“Pension Plans” means Benefit Plans providing pensions, superannuation benefits or retirement savings including pension plans, top up pensions or supplemental pensions, “registered retirement savings plans” (as defined in the Income Tax Act (Canada)), “registered pension plans” (as defined in the Income Tax Act (Canada)) and “retirement compensation arrangements” (as defined in the Income Tax Act (Canada));

“Pension Plan Unfunded Liability” means an unfunded liability in respect of any Pension Plan, including a going concern unfunded liability, a solvency deficiency or wind-up deficiency;

“Person” means any individual, sole proprietorship, partnership, firm, entity, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, Governmental Authority, and where the context requires any of the ABRIDGED - 9 - foregoing when they are acting as trustee, executor, administrator or other legal representative;

“Purchase Price” has the meaning given in Section 3.1;

“Purchaser” has the meaning given in the Preamble;

“Purchaser Benefit Plans” has the meaning given in Section 9.6(a);

“Purchaser Indemnified Parties” has the meaning given in Section 10.1(a);

“Purchaser Parent” has the meaning given in the Preamble;

“Regulatory Approvals” means CRTC Approval and Competition Act Approval;

“Restricted Assets” has the meaning given in Section 9.8(a);

“Shareholders Agreement” means the Unanimous Shareholders Agreement among Family, Nelvana Limited, YTV Canada, Inc. and the Company dated as of September 1, 2006, as amended to date;

“Statutory Plans” means statutory benefit plans which the Company is required to participate in or comply with, including the Canada and Quebec Pension Plans and plans administered pursuant to applicable health tax, workplace safety insurance and employment insurance legislation;

“Subsequent Transaction” has the meaning given in Section 11.4(a);

“Target Working Capital” means $90,750,000;

“Tax Returns” means all returns, reports, declarations, elections, notices, filings, forms, statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed or required to be made, prepared or filed by Law in respect of Taxes;

“Taxes” means any taxes, duties, fees, premiums, assessments, imposts, levies and other charges of any kind whatsoever imposed by any Governmental Authority, including all ABRIDGED - 10 -

interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Authority in respect thereof, and including those levied on, or measured by, or referred to as, income, gross receipts, profits, capital, transfer, land transfer, sales, goods and services, harmonized sales, use, value-added, excise, stamp, withholding, business, franchising, property, development, occupancy, employer health, payroll, employment, health, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all licence, franchise and registration fees and all employment insurance, health insurance and Canada, Québec and other government pension plan premiums or contributions;

“Unresolved Objections” has the meaning given in Section 3.3(c);

“Vendor’s Core Representations” has the meaning given in Section 7.1; and

“Working Capital” means, with respect to the Company, the current assets (and any other assets listed in Schedule 3.3(a) including long term program and rights assets) of the Company minus the current liabilities (and any other liabilities listed in Schedule 3.3(a)) of the Company, in each case, as set forth in Schedule 3.3(a) and calculated in accordance with the sample calculation set forth in Schedule 3.3(a).

1.2 Certain Rules of Interpretation

In this Agreement:

(a) Consent – Whenever a provision of this Agreement requires an approval or consent and such approval or consent is not delivered within the applicable time limit, then, unless otherwise specified, the Party whose consent or approval is required shall be conclusively deemed to have withheld its approval or consent.

(b) Currency – Unless otherwise specified, all references to money amounts are to lawful currency of Canada.

(c) Governing Law – This Agreement is a contract made under and shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable in the Province of Ontario. ABRIDGED - 11 -

(d) Headings – Headings of Articles and Sections are inserted for convenience of reference only and do not affect the construction or interpretation of this Agreement.

(e) Including – Where the word “including” or “includes” is used in this Agreement, it means “including (or includes) without limitation”.

(f) No Strict Construction – The language used in this Agreement is the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.

(g) Number and Gender – Unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.

(h) Severability – If, in any jurisdiction, any provision of this Agreement or its application to any Party or circumstance is restricted, prohibited or unenforceable, such provision shall, as to such jurisdiction, be ineffective only to the extent of such restriction, prohibition or unenforceability without invalidating the remaining provisions of this Agreement and without affecting the validity or enforceability of such provision in any other jurisdiction or without affecting its application to other Parties or circumstances.

(i) Statutory references – A reference to a statute includes all regulations and rules made pursuant to such statute and, unless otherwise specified, the provisions of any statute, regulation or rule which amends, supplements or supersedes any such statute, regulation or rule.

(j) Time – Time is of the essence in the performance of the Parties’ respective obligations.

(k) Time Periods – Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on ABRIDGED - 12 -

which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day.

1.3 Knowledge

Any reference to the knowledge of any Party means to the actual knowledge, information and belief of such Party.

1.4 Entire Agreement

This Agreement and the agreements and other documents making reference hereto and/or thereto and entered into pursuant to or in connection with this Agreement, constitute the entire agreement between the Parties and set out all the covenants, promises, warranties, representations, conditions and agreements between the Parties in connection with the subject matter of this Agreement and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, pre-contractual or otherwise. There are no covenants, promises, warranties, representations, conditions, understandings or other agreements, whether oral or written, pre-contractual or otherwise, express, implied or collateral between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement and any document making reference hereto and/or thereto and entered into pursuant to or in connection with this Agreement.

ARTICLE 2 PURCHASE AND SALE

2.1 Action by Bell and Purchaser

Subject to the provisions of this Agreement, at the Closing Time:

(a) Purchase and Sale of Shares – Bell shall sell and the Purchaser shall purchase the Company Shares and the HoldCo Shares;

(b) Payment of Purchase Price – the Purchaser shall pay the Purchase Price to Bell as provided in Section 3.2; ABRIDGED - 13 -

(c) Transfer and Delivery of the Purchased Shares – Bell shall transfer and deliver to the Purchaser share certificates representing the Company Shares and the HoldCo Shares, each duly endorsed in blank for transfer, or accompanied by irrevocable security transfer powers of attorney duly executed in blank, in either case by the holders of record, and shall take such steps as shall be necessary to cause the Company and HoldCo to enter the Purchaser or its nominee(s) upon the books of the Company and HoldCo, respectively, as the holder of the Company Shares or the HoldCo Shares, as applicable, and to issue one or more share certificates to the Purchaser or its nominee(s) representing the Company Shares or the HoldCo Shares, as applicable; and

(d) Other Documents – Bell and Purchaser shall deliver such other documents as may be necessary to complete the transactions provided for in this Agreement.

2.2 Place of Closing

The Closing shall take place at the Closing Time at the offices of Osler, Hoskin & Harcourt LLP located at 1 First Canadian Place, Suite 6100, Toronto, Ontario, or at such other place as may be agreed upon by Bell and the Purchaser.

2.3 Allocation of Purchase Price

80% of the Purchase Price shall be allocated to the purchase of the Company Shares and 20% of the Purchase Price shall be allocated to the purchase of the HoldCo Shares. In the event of an adjustment to the Purchase Price pursuant to Section 3.4, the increase or decrease to the Purchase Price will be allocated between the Company Shares and the HoldCo Shares in the same proportion as set forth in the preceding sentence. The Parties agree to report the purchase and sale of the Company Shares and the HoldCo Shares in any Tax Returns in accordance with the allocation of Purchase Price as determined pursuant to this Section 2.3. ABRIDGED - 14 -

ARTICLE 3 PURCHASE PRICE

3.1 Purchase Price

The aggregate amount payable by the Purchaser for the Company Shares and the HoldCo Shares (the “Purchase Price”) shall be the amount of $249,000,000.

3.2 Satisfaction of Purchase Price

At the Closing Time, the Purchaser shall satisfy the Purchase Price by payment to Bell, or such Affiliate of Bell as Bell may designate, of $249,000,000, by wire transfer of immediately available funds, to an account designated by Bell or such designee no less than two Business Days prior to the Closing Date.

3.3 Delivery of Closing Date Balance Sheet

(a) Within 60 days after the Closing Date, the Purchaser shall prepare and deliver to Bell balance sheets setting forth the assets and liabilities of the Company and HoldCo as of the time immediately prior to the Closing Time (the “Closing Date Balance Sheet”). The Closing Date Balance Sheet shall be prepared in good faith by the Purchaser in accordance with GAAP and applied on the same basis as and using the same accounting principles and practices used in the preparation of the Company’s most recent annual financial statements. The Closing Date Balance Sheet shall set forth the final amount of Closing Working Capital of the Company based on such Closing Date Balance Sheet in accordance with the sample calculation set forth in Schedule 3.3(a). If requested by Bell in writing, the Purchaser shall allow Bell and its auditors or other representatives reasonable access to (i) review the working papers and other documentation used or prepared in connection with the preparation of, or which otherwise form the basis of the Closing Date Balance Sheet and (ii) senior management and accounting personnel of the Company and the Purchaser during normal business hours.

(b) No later than 30 days after delivery by the Purchaser to Bell of the Closing Date Balance Sheet (the “Objection Deadline Date”), Bell shall deliver either a notice ABRIDGED - 15 -

indicating that Bell accepts the Closing Date Balance Sheet (the “Notice of Acceptance”) or a reasonably detailed statement describing Bell’s objections to the Closing Date Balance Sheet (the “Objection Notice”). If Bell delivers to the Purchaser the Objection Notice prior to the Objection Deadline Date, only those matters specified in the Objection Notice shall be deemed to be in dispute, and all other matters set forth in the Closing Date Balance Sheet shall be final and binding on the Parties. If Bell delivers to the Purchaser a Notice of Acceptance or fails to deliver to the Purchaser an Objection Notice prior to the Objection Deadline Date, the Closing Date Balance Sheet shall be the Final Closing Statement and shall be final and binding on the Parties for all purposes under this Agreement.

(c) Bell and the Purchaser shall attempt to resolve all of the items in dispute set out in the Objection Notice within 15 days of receipt of the Objection Notice by Bell. Any items set forth in the Objection Notice that are not resolved within such 15 day period (the “Unresolved Objections”) may be referred thereafter by either Party to the Neutral Auditor.

(d) The Neutral Auditor shall not make any determination for an amount outside the range of the amounts disputed by the Parties. The Parties shall each provide or make available all documents and information as are reasonably required by the Neutral Auditor to make its determination promptly following any request received from the Neutral Auditor. The Neutral Auditor shall make its final determination with respect to the Unresolved Objections as promptly as practicable, and in any event, within 30 days from the date the Unresolved Objections were submitted to the Neutral Auditor, and upon making its final determination, shall deliver to Bell and the Purchaser a statement setting forth such final determination of the Unresolved Objections. The determination of the Neutral Auditor with respect to the Unresolved Objections shall be final and binding on the Parties. Upon receipt of the final determination of the Unresolved Objections, the Purchaser shall adjust the Closing Date Balance Sheet, including the final amount of Closing Working Capital, as required, in accordance with the Neutral Auditor’s determination of the Unresolved Objections and deliver such ABRIDGED - 16 -

revised statement to Bell within five Business Days of receipt by the Purchaser from the Neutral Auditor of the Neutral Auditor’s determination of the Unresolved Objections.

(e) The Final Closing Statement shall be (i) the Closing Date Balance Sheet upon delivery by Bell to the Purchaser of the Notice of Acceptance or the failure of Bell to deliver to the Purchaser prior to the Objection Deadline Date the Objection Notice pursuant to Section 3.3(b) or (ii) the Closing Date Balance Sheet as modified to the satisfaction of both Parties as a result of (A) the resolution of all of the disputes pursuant to Section 3.3(c) or (B) the resolution of all of the Unresolved Objections by the Neutral Auditor pursuant to Section 3.3(d).

(f) The fees and expenses of the Neutral Auditor in acting in accordance with this ARTICLE 3 shall be shared equally by the Purchaser and Bell.

3.4 Post-Closing Adjustment

(a) [Redacted] [The redacted information relates to the determination of any post-closing adjustment payable by Bell or the Purchaser.]

(b) Any payments made pursuant to Section 3.4Error! Reference source not found. shall be made by the applicable Party (i) within five Business Days of the Final Closing Statement becoming or being deemed to become final and binding on the Parties or, if the Final Closing Statement is the Closing Date Balance Sheet as modified in accordance with 3.3(e)(ii), within five Business Days of receipt by Bell of the revised Closing Date Balance Sheet, and (ii) by wire transfer of immediately available funds to the accounts specified in writing by the receiving Party. Notwithstanding (i) above, a Party shall have at least two Business Days from receipt of wire transfer instructions to make any payment pursuant to Section 3.4Error! Reference source not found..

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BELL ABRIDGED - 17 -

Bell represents and warrants to the Purchaser the matters set out below.

4.1 Residence of Bell

Bell is not a non-resident of Canada for the purposes of the Income Tax Act (Canada).

4.2 Status of Bell and Right to Sell

Bell is a corporation existing under the laws of Canada. At the Closing Time, Bell will have the right to dispose of the Company Shares and the HoldCo Shares as provided in this Agreement and such disposition will not violate, contravene, breach or offend against or result in any default under any (a) Contract to which Bell or any of its Affiliates is a party, or otherwise bound or affected, (b) charter or by-law provision of Bell or any of its Affiliates, or (c) Order, judgment, decree, licence, permit or Law to which Bell or any of its Affiliates is subject, or otherwise bound or affected, except in the case of (a) and (c) where such violation, contravention, breach, offence or default would not reasonably be expected to materially and adversely affect the ability of Bell to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement. At the Closing Time, Bell or any of its Affiliates will be the sole registered and beneficial owner of the Company Shares and the HoldCo Shares, in each case, and clear of all Encumbrances.

For the purposes of this Section 4.2, the term “Affiliates” shall not include the Company, HoldCo or HoldCo 2.

4.3 Capitalization

At the Closing Time, the Company Shares will constitute all of the securities in the capital of the Company beneficially owned by Bell, directly or indirectly. At the Closing Time, the HoldCo Shares will constitute all of the shares in the capital of HoldCo beneficially owned by Bell, directly or indirectly. All of the Company Shares and all of the HoldCo Shares have been duly and validly issued and are outstanding as fully paid and non-assessable shares. To the knowledge of Bell, after having made due inquiries of Astral, no options, warrants or other rights to purchase the Company Shares or the HoldCo Shares and no securities or obligations convertible into or exchangeable for the Company Shares or the HoldCo Shares have been authorized or agreed to be issued or are outstanding. There is no indebtedness or other amounts ABRIDGED - 18 -

owing by the Company, HoldCo or HoldCo 2 to Bell or any of its Affiliates other than indebtedness incurred by any of the Company, HoldCo or HoldCo 2 accounted for in the calculation of Working Capital.

4.4 Due Authorization and Enforceability of Obligations

Bell has all necessary corporate power, authority and capacity to enter into this Agreement and to carry out its obligations under this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Bell. This Agreement constitutes, and each other agreement to be executed by Bell in connection with the Closing will constitute, a valid and binding obligation of Bell enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally or by general principles of equity, regardless of whether asserted in a proceeding in equity or Law.

4.5 Absence of Conflicts

Other than with respect to the Regulatory Approvals, Bell is not a party to, bound or affected by or subject to any:

(a) indenture, mortgage, lease, agreement, obligation or instrument;

(b) charter or by-law provision; or

(c) Laws or Governmental Authorizations;

that would be violated, breached by, or under which default would occur or an Encumbrance would, or with notice or the passage of time would, be created as a result of the execution and delivery of, or the performance of obligations under, this Agreement or any other agreement to be entered into under the terms of this Agreement.

4.6 Regulatory Approvals

Other than the Regulatory Approvals and approvals under the Competition Act and by the CRTC in connection with the Astral Arrangement, no approval, Order, consent of or filing with any ABRIDGED - 19 -

Governmental Authority is required on the part of Bell, Family, the Company, HoldCo or HoldCo 2, in connection with the execution, delivery and performance of this Agreement or any other documents and agreements to be delivered under this Agreement or the performance of Bell’s obligations under this Agreement or any other documents and agreements to be delivered under this Agreement.

4.7 Litigation

There are no Claims, investigations or other proceedings (other than proceedings to obtain the Regulatory Approvals and approvals under the Competition Act and by the CRTC in connection with the Astral Arrangement), including appeals and applications for review, in progress or, to the knowledge of Bell, pending or threatened against or relating to Bell, before any Governmental Authority, which, if determined adversely to Bell, would,

(a) enjoin, restrict or prohibit the transfer of all or any part of the Company Shares or the HoldCo Shares as contemplated by this Agreement; or

(b) materially delay, or restrict or prevent Bell from fulfilling any of its obligations set out in this Agreement or arising from this Agreement, and Bell has no knowledge of any existing ground on which any such action, suit, litigation or proceeding might be commenced with any reasonable likelihood of success.

4.8 Benefit Plans

(a) Schedule 4.8(a) sets forth a complete list of the Benefit Plans. None of the Benefit Plans is a Multi-Employer Plan. Other than the Astral Pension Plans disclosed on Schedule 4.8(a), none of the Benefits Plans is a Pension Plan.

(b) Current and complete copies of all written Benefit Plans as amended to date or, where oral, written summaries of the terms thereof, and all booklets and communications concerning the Benefit Plans which have been provided to persons entitled to benefits under the Benefit Plans have been delivered or made available to the Purchaser together with copies of all material documents relating to the Benefit Plans. ABRIDGED - 20 -

4.9 Business of HoldCo

HoldCo does not conduct and has not conducted any business other than the ownership and control of the shares of HoldCo 2 set forth on Exhibit A and has no assets or liabilities other than those arising from its ownership of such shares.

4.10 Business of HoldCo 2

HoldCo 2 does not conduct and has not conducted any business other than the ownership and control of the shares of the Company set forth on Exhibit A and has no assets or liabilities other than those arising from its ownership of such shares.

4.11 Third Party Consents

No notifications, approvals or consents are required to be obtained by Bell or any of its Affiliates in connection with the execution, delivery and performance of this Agreement or any other documents and agreements to be delivered under this Agreement.

For the purposes of this Section 4.11, the term “Affiliates” shall not include the Company, HoldCo or HoldCo 2.

4.12 Independence of Parties

The Parties are not Affiliates, and this Agreement and all other related commercial dealings amongst the Parties have been entered into at arm’s length.

4.13 No Broker

Bell has carried on all negotiations relating to this Agreement and the transactions contemplated in this Agreement directly and without intervention on its behalf of any other party in such manner as to give rise to any valid claim for a brokerage commission, finder’s fee or other like payment against the Purchaser or the Company, HoldCo or HoldCo 2.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to Bell the matters set out below: ABRIDGED - 21 -

5.1 Status of the Purchaser

The Purchaser is a corporation existing under the laws of Canada.

5.2 Due Authorization and Enforceability of Obligations

The Purchaser has all necessary corporate power, authority and capacity to enter into this Agreement and to carry out its obligations under this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action of the Purchaser. This Agreement constitutes, and each other agreement to be executed by Purchaser in connection with the Closing will constitute, a valid and binding obligation of the Purchaser enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally or by general principles of equity, regardless of whether asserted in a proceeding in equity or Law.

5.3 Absence of Conflicts

Other than with respect to Regulatory Approvals, the Purchaser is not a party to, bound or affected by or subject to any:

(a) indenture, mortgage, lease, agreement, obligation or instrument;

(b) charter or by-law provision; or

(c) Laws or Governmental Authorizations;

that would be violated, breached by, or under which default would occur or an Encumbrance would, or with notice or the passage of time would, be created as a result of the execution and delivery of, or the performance of obligations under, this Agreement or any other agreement to be entered into under the terms of this Agreement.

5.4 Litigation

There are no Claims, investigations or other proceedings, including appeals and applications for review, in progress or, to the knowledge of the Purchaser, pending or threatened against or ABRIDGED - 22 - relating to the Purchaser, before any Governmental Authority, which, if determined adversely to the Purchaser, would,

(a) prevent the Purchaser from paying the Purchase Price to Bell;

(b) enjoin, restrict or prohibit the transfer of all or any part of the Company Shares or the HoldCo Shares as contemplated by this Agreement; or

(c) materially delay, or restrict or prevent the Purchaser from fulfilling any of its obligations set out in this Agreement or arising from this Agreement, and the Purchaser has no knowledge of any existing ground on which any such action, suit, litigation or proceeding might be commenced with any reasonable likelihood of success.

5.5 No Broker

The Purchaser has carried on all negotiations relating to this Agreement and the transactions contemplated in this Agreement directly and without the intervention on its behalf of any other party in such manner as to give rise to any valid claim for a brokerage commission, finder’s fee or other like payment against Bell.

5.6 Share Ownership

(a) During the period commencing on January 1, 2012 and ending at the Closing Time, the Purchaser, together with Purchaser Parent and with persons controlled by Purchaser Parent (for purposes of the Income Tax Act (Canada)), did not own any shares of any class in the capital of Astral, directly or indirectly, through a trust or a partnership.

(b) To the knowledge of the Purchaser, after reasonable enquiry, no person listed in Schedule 5.6 owned, either alone or together, 10% or more of the shares of any class in the capital of the Purchaser or of a corporation related to the Purchaser and that has a significant direct or indirect interest in any shares of the Purchaser at the Closing Time. ABRIDGED - 23 -

(c) During the period commencing on January 1, 2012 and ending at the Closing Time, the Purchaser, Purchaser Parent and their respective Affiliates together, to the knowledge of Purchaser, after reasonable enquiry, with persons that are related to the Purchaser or Purchaser Parent (for purposes of the Income Tax Act (Canada)), did not own, directly or indirectly, through a trust or a partnership, 10% or more of the shares of any class in the capital of Astral.

5.7 No Partner

The Purchaser has not entered into any agreement with nor does it have any partners not disclosed to Bell pursuant to which Purchaser would not be considered the sole purchaser in respect of the transactions contemplated herein.

5.8 Qualified Corporation

The Purchaser is a “Canadian” within the meaning of the Direction to the CRTC (Ineligibility of Non-Canadians), SOR/97-192, as amended from time to time, and is “Canadian” as defined in the Investment Canada Act (Canada), and, without limiting the generality of the foregoing, Purchaser is not controlled in fact either directly or indirectly by Persons who are non- Canadians.

5.9 Independence of Parties

The Parties are not Affiliates, and this Agreement and all other related commercial dealings amongst the Parties have been entered into at arm’s length.

5.10 Continued Operation of the Business of the Company

It is the intent of the Purchaser that the business of operating the Channels will be continued by the Company (or another Affiliate of the Purchaser) following the acquisition of the Company Shares and the HoldCo Shares by the Purchaser. ABRIDGED - 24 -

ARTICLE 6 SURVIVAL

6.1 Nature and Survival

All representations, warranties and covenants contained in this Agreement on the part of each of the Parties shall survive the Closing for the same period of time during which an obligation to indemnify exists pursuant to Section 10.1 or 10.2.

ARTICLE 7 PURCHASER’S CONDITIONS PRECEDENT

The obligation of the Purchaser to complete the purchase of the Company Shares and the HoldCo Shares under this Agreement shall be subject to the satisfaction of, or compliance with, at or before the Closing Time, each of the following conditions precedent (each of which is acknowledged to be inserted for the exclusive benefit of the Purchaser and may be waived by it in whole or in part).

7.1 Truth and Accuracy of Representations of Bell at the Closing Time

The representations and warranties made by Bell pursuant to Sections 4.1 (Residency), 4.2 (Status and Right to Sell), 4.3 (Capitalization) and 4.4 (Due Authorization and Enforceability of Obligations) (the “Vendor’s Core Representations”) shall be true and correct as at the Closing Time and with the same effect as if made at and as of the Closing Time and the Purchaser shall have received a certificate from an officer of Bell confirming the truth and correctness of such representations and warranties. The remaining representations and warranties made by Bell pursuant to this Agreement shall be true and correct in all material respects as at the Closing Time and with the same effect as if made at and as of the Closing Time and the Purchaser shall have received a certificate from an officer of Bell confirming the truth and correctness of such representations and warranties.

7.2 Performance of Obligations

Bell shall have performed or complied with, in all material respects, all its obligations and covenants under this Agreement and the Purchaser shall have received a certificate from an officer of Bell confirming such performance or compliance, as the case may be. ABRIDGED - 25 -

7.3 Receipt of Closing Documentation

On or prior to the Closing, Bell shall have delivered or caused to be delivered to the Purchaser:

(a) the certificate or certificates representing the Company Shares and the HoldCo Shares duly endorsed for transfer to the Purchaser;

(b) a receipt for the payment of the Purchase Price;

(c) evidence that all applicable corporate proceedings in connection with the transactions contemplated by this Agreement have been taken by Bell, such evidence to be in form and substance satisfactory to the Purchaser, acting reasonably; and

(d) a certificate of status of Bell, dated no more than five days prior to the Closing Date.

7.4 No Proceedings

There shall be no Order issued materially delaying, or restricting or preventing, and no pending or threatened Claim of a Governmental Authority, or judicial or administrative proceeding commenced, for the purpose of enjoining, materially delaying, restricting or preventing, the consummation of the transactions contemplated by this Agreement.

7.5 CRTC Approval and Competition Act Approval

CRTC Approval and Competition Act Approval shall have been received.

7.6 Astral Arrangement

The Astral Arrangement shall have been completed.

7.7 Termination of Pension Plan Participation

Bell shall have delivered or caused to be delivered to the Purchaser documents (satisfactory to Purchaser acting reasonably) evidencing the Company’s cessation of participation in the Astral Pension Plan effective on a date at or before the Closing Time, and without any further liability or obligation on the Company for making contributions to the Astral Pension Plan and without ABRIDGED - 26 - any liability or obligation on the Company for any Pension Plan Unfunded Liabilities under the Astral Pension Plan.

ARTICLE 8 BELL’S CONDITIONS PRECEDENT

The obligations of Bell to complete the sale of the Company Shares and the HoldCo Shares under this Agreement shall be subject to the satisfaction of or compliance with, at or before the Closing Time, each of the following conditions precedent (each of which is acknowledged to be inserted for the exclusive benefit of Bell and may be waived by it in whole or in part).

8.1 Truth and Accuracy of Representations of the Purchaser at Closing Time

The representations and warranties made by Purchaser pursuant to Sections 5.1 (Status) and 5.2 (Due Authorization and Enforceability of Obligations) shall be true and correct as at the Closing Time and with the same effect as if made at and as of the Closing Time and Bell shall have received a certificate from an officer of the Purchaser confirming the truth and correctness of such representations and warranties. The remaining representations and warranties made by the Purchaser pursuant to this Agreement shall be true and correct in all material respects as at the Closing Time and with the same effect as if made at and as of the Closing Time and Bell shall have received a certificate from an officer of the Purchaser confirming the truth and correctness of such representations and warranties.

8.2 Performance of Obligations

The Purchaser shall have performed or complied with, in all material respects, all its obligations and covenants under this Agreement and Bell shall have received a certificate from an officer of the Purchaser confirming such performance or compliance, as the case may be.

8.3 Receipt of Closing Documentation

On or prior to the Closing, the Purchaser shall have delivered or caused to be delivered to Bell:

(a) evidence that all applicable corporate proceedings in connection with the transactions contemplated by this Agreement have been taken by the Purchaser, such evidence to be in form and substance satisfactory to Bell, acting reasonably; ABRIDGED - 27 -

(b) a certificate of status of the Purchaser, dated no more than five days prior to the Closing Date; and

(c) a signed acknowledgement of the termination of the Shareholders Agreement to be effective as at the Closing Time.

8.4 No Proceedings

There shall be no Order issued materially delaying, or restricting or preventing, and no pending or threatened Claim of a Governmental Authority, or judicial or administrative proceeding commenced, for the purpose of enjoining, materially delaying, restricting or preventing, the consummation of the transactions contemplated by this Agreement.

8.5 CRTC Approval and Competition Act Approval

CRTC Approval and Competition Act Approval shall have been received.

8.6 Astral Arrangement

The Astral Arrangement shall have been completed.

ARTICLE 9 OTHER COVENANTS OF THE PARTIES

9.1 Conduct of Business Prior to Astral Closing

During the period from the date of this Agreement to the date on which the transactions contemplated by the BCE-Astral Agreement have been consummated, the Parties shall each use their commercially reasonable efforts to cause the Company, HoldCo and HoldCo 2 to conduct each of their respective businesses in the ordinary course, which, in respect of Bell, shall be limited to, (a) using its commercially reasonable efforts to enforce each of the covenants set forth in Section 4.1 of the BCE-Astral Agreement to the extent that a failure to enforce such covenants would have an adverse effect on the Company, HoldCo or HoldCo 2 and (b) not granting any waivers of any covenants or agreements made by Astral pursuant to the BCE-Astral Agreement to the extent any such waiver would have an adverse effect on the Company, HoldCo or HoldCo 2. ABRIDGED - 28 -

9.2 Conduct of Business After the Astral Closing

(a) The Purchaser acknowledges that, if the Closing does not occur forthwith following the closing of the Astral Arrangement, such that the BCE Trust Arrangements are entered into pending Closing, the BCE Trustee shall have full power and authority to direct the voting of the Company Shares and HoldCo Shares as is usual for trust arrangements of the type of the BCE Trust Arrangements, and agrees that any action or omission by the BCE Trustee in the conduct of the voting of the Company Shares and HoldCo Shares shall, notwithstanding any provision to the contrary, be permitted for the duration of the BCE Trust Arrangements, it being understood that any such action omission by the BCE Trustee shall not limit the Purchaser’s right to indemnification pursuant to ARTICLE 10 if the result of such act or omission is that Bell has breached a covenant herein set forth or a representation or warranty of Bell made herein. Bell agrees that if the BCE Trust Arrangements are entered into prior to Closing, it shall, subject to the terms of the BCE Trust Arrangements, make commercially reasonable efforts to cause the BCE Trustee to act in a manner consistent with the covenants set forth in this ARTICLE 9.

(b) If the BCE Trust Arrangements are entered into prior to Closing, the Purchaser shall cause YTV Canada, Inc. and Nelvana Limited (in each case, solely in their capacity as shareholders of the Company, HoldCo and HoldCo 2, as applicable), to use their commercially reasonable efforts to cause the Company, HoldCo and HoldCo 2 to conduct their respective businesses in the ordinary course for the duration of the BCE Trust Arrangements in a manner consistent with past practice.

9.3 Actions to Satisfy Closing Conditions

Each of the Parties shall take all such actions as are within its power to control, and use reasonable commercial efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with each of the conditions and covenants set forth in ARTICLE 7 (other than the condition set forth in 7.5 (in respect of which all obligations under this Agreement are set forth in Section 9.5) and Section 7.6), ARTICLE 8 (other than the ABRIDGED - 29 -

condition set forth in Section 8.5 (in respect of which all obligations under this Agreement are set forth in Section 9.5) and Section 8.6) and ARTICLE 9 which are for the benefit of any other Party; provided, however, to the extent that the conditions set forth in either Section 8.1 or 8.2 or the covenants of the Purchaser set forth in ARTICLE 9 are not satisfied or complied with as a result of, or in connection with, a misrepresentation, inaccuracy or breach of the representations and warranties set forth in either Section 5.6(b) or 5.6(c), or as a result of a breach of a covenant related to any representations or warranties set forth in Section 5.6(b) or 5.6(c), the Purchaser shall have no liability (except to the extent of any intentional misrepresentation with respect to Section 5.6(b) and 5.6(c) by the Purchaser or fraud of the Purchaser with respect to Section 5.6(b) and 5.6(c)).

9.4 Preservation of Records

The Purchaser shall take all reasonable steps to preserve and keep the Book and Records of the Company delivered to it in connection with the completion of the transactions contemplated by this Agreement for a period of six years from the Closing Date, or for any longer period as may be required by any Laws or Governmental Authority, and shall make such Book and Records available to Bell as may be reasonably required by it in connection with a Claim by the Purchaser against Bell under this Agreement or relating to any inquiries or requirements of any Governmental Authority with jurisdiction over Bell.

9.5 Regulatory Approvals

(a) Purchaser shall use its best efforts and take any and all actions and steps required or advisable to obtain the Regulatory Approvals, including proposing, negotiating, agreeing to and implementing, in any fashion, any remedy; provided, however, nothing in this Agreement shall require Purchaser to agree to or implement a material remedy.

(b) The Purchaser and the Vendor shall cooperate with one another in connection with obtaining the Regulatory Approvals in respect of the purchase and sale of the Company Shares and the HoldCo Shares as contemplated by this Agreement, including providing or submitting on a timely basis all filings, written submissions, documentation and information that is required, or in the reasonable ABRIDGED - 30 -

opinion of either Party, advisable, in connection with obtaining such Regulatory Approvals, provided that competitively sensitive information may be provided only to the external counsel of the other Party.

(c) For greater certainty, with respect to the CRTC Approval, the Purchaser, on behalf of the Company, shall, as promptly as practicable, prepare a draft of all required documents, registrations, statements, petitions, filings and applications for the CRTC Approval in respect of the purchase and sale of the Company Shares and the HoldCo Shares as contemplated by this Agreement and deliver such draft application to Bell no later than 7 days following the date of this Agreement (or such later date as Bell may agree in writing). The application for the CRTC Approval will include the commitment by the Purchaser to honour the conditions of licence imposed by the CRTC that are existing as of the date hereof with respect to the Channels, subject to any amendments to such conditions of license imposed by the CRTC in connection with the license renewal applications to the CRTC, dated September 13, 2012, in each case, on the licenses to be held by the Company and a proposed “tangible benefits package” equivalent to recent industry standards for transactions of this nature which shall include a proposed tangible benefits package of 10% of the value of the transaction contemplated herein as determined by the CRTC. Bell shall be entitled to comment upon such application for the CRTC Approval, it being understood that the Purchaser shall amend such application to reflect such comments inasmuch as it considers such comments to be appropriate, in its reasonable discretion. Bell shall (or the Purchaser on behalf of Bell shall) file such application for the CRTC Approval no later than 15 days following the date of this Agreement. The Purchaser shall use reasonable commercial efforts to obtain the CRTC Approval in respect of the purchase and sale of the Company Shares and the HoldCo Shares as contemplated by this Agreement, including requesting that the CRTC process the application in the most expedited manner available and requesting the earliest possible hearing date for the consideration of the application by the CRTC, should such a hearing be deemed necessary, so as to allow the Closing Date to occur as soon as possible and in any event on or prior to the Outside Date. If the CRTC rejects the transactions contemplated in this Agreement, the Purchaser shall appeal the ABRIDGED - 31 -

decision and reapply to CRTC within 30 days of the CRTC decision with an application that addresses the matters raised by the CRTC and the provisions of this Section 9.5 shall apply to such new application, mutatis mutandis.

(d) For greater certainty, with respect to the Competition Act Approval, the Parties shall: (i) as promptly as practicable and in any event within 5 days following the date of this Agreement, prepare and file a joint submission to the Commissioner of Competition seeking an Advance Ruling Certificate pursuant to section 102 of the Competition Act, a no-action letter, waiver of the obligation to provide notice under the Competition Act, and approval by the Commissioner of Competition under any Consent Agreement, in respect of the purchase and sale of the Company Shares and the HoldCo shares as contemplated by this Agreement; and (ii) unless waived by the mutual agreement of the Parties, or Competition Act Approval has been received, provide notice under section 114 of the Competition Act with respect to the purchase and sale of the Company Shares and the HoldCo Shares by no later than March 25, 2013.

(e) Subject to Laws, the Purchaser and Bell shall keep each other fully informed as to the status of and the processes and proceedings relating to obtaining the Regulatory Approvals, and shall promptly notify each other of any material notice or other material communication (including providing copies of any correspondence, deficiency responses, and responses to information requests) from any Governmental Authority in connection with obtaining the Regulatory Approvals. Prior to the completion of the Astral Arrangements, Purchaser shall not make any submissions or filings or respond to any information requests, or participate in any meetings or any material conversations with any Governmental Authority in respect of any filings, investigations or other inquiries related to the obtaining of the relevant Regulatory Approval without the prior approval of Bell, not to be unreasonably withheld. Following completion of the Astral Arrangements, neither Party shall make any submissions or filings or respond to any information requests, participate in any meetings or any material conversations with any Governmental Authority in respect of any filings, investigations or other inquiries related to the obtaining of the relevant Regulatory ABRIDGED - 32 -

Approval unless it consults with the other Party in advance and gives the other Party the opportunity to review drafts of any such submissions, filings, or responses and considers its comments in good faith, or to attend and participate in any meetings or material communications. Despite the foregoing, submissions, filings, documentation or other written communications with any Governmental Authority may be redacted as necessary before sharing with the other Party to address reasonable attorney-client or other privilege or confidentiality concerns, provided that a Party shall provide external legal counsel to the other Party non- redacted versions of drafts or final submissions, filings or other written communications with such Governmental Authority on the basis that the redacted information will not be shared with its clients.

(f) For greater certainty, any changes or amendments proposed to be made by the Purchaser to the application for the CRTC Approval as filed, or any response to be filed in respect of a deficiency question, or any filings, submissions or responses to information requests made in connection with the Competition Act Approval shall be submitted to Bell for comments, prior to being filed, it being understood that the Purchaser shall amend the relevant materials to reflect such comments inasmuch as the Purchaser considers such comments to be appropriate, in Purchaser’s reasonable discretion.

(g) Time is of the essence and neither Party shall take any action that could reasonably be expected to negatively affect, hinder or delay the receipt of regulatory approvals for and completion of the Astral Arrangement, the Regulatory Approvals, or the completion of the purchase and sale of any of the Company Shares or the HoldCo Shares as contemplated by this Agreement.

(h) All costs and expenses incurred in connection with obtaining the Regulatory Approvals (including all filing fees, the costs and expenses of any tangible benefits package or any other regulatory levies, charges or payments) shall be borne by the Purchaser, other than costs and expenses of any advisors retained by, or for the benefit of, Bell, including legal counsel, which costs and expenses shall be for the account of Bell. ABRIDGED - 33 -

9.6 Benefit Plans

(a) Effective as of the Closing Time, the Purchaser shall establish or otherwise designate non-pension benefit plans (the “Purchaser Benefit Plans”) to provide non-pension benefits to the Company employees in respect of the period after the Closing Time. For greater certainty, nothing in this Agreement shall limit the right of the Purchaser to, after the Closing Date, amend or terminate in whole or in part any Purchaser Benefit Plans, nor shall anything in this Agreement require any Purchaser Benefit Plans to replicate any particular benefit provided under a Astral Benefit Plan; provided that any Company employee who is employed in the Province of Québec and is terminated by the Company within 12 months following the Closing Time shall be provided with the same notice period as such Company employee would have received had his or her employment been terminated immediately prior to the Closing Time.

(b) Effective as of the Closing Time, each Company employee shall cease to participate in and accrue benefits under the Bell and/or Astral Benefit Plans, and shall commence participation in the Purchaser Benefit Plans; provided that if any Company employee suffers a disability after the Closing Date and such disability is considered under the terms of the relevant Astral Benefit Plan in which such Company employee participated to be a recurrence of a disability that occurred on or prior to the Closing Date that is eligible for coverage, then the relevant Astral Benefit Plan shall, to the extent permitted under such Astral Benefit Plan, make disability payments to such Company employee in relation to such recurring disability.

(c) The Purchaser Benefit Plans shall, to the extent permitted by Laws, recognize all service with the Company and/or membership in the Benefit Plans for the purposes of determining eligibility for membership in, and entitlement to benefits under, the Purchaser Benefit Plans.

(d) Bell shall be responsible, in accordance with the terms of the applicable Astral Benefit Plan, for any and all claims incurred by the Company employees (and their eligible spouses, beneficiaries and dependants) prior to the Closing Time. ABRIDGED - 34 -

The Purchaser shall be responsible, in accordance with the terms of the applicable Purchaser Benefit Plan, for any and all claims incurred by the Company employees (and their eligible spouses, beneficiaries and dependants) on and after the Closing Time.

(e) Subject to applicable Laws, Bell shall provide to the Purchaser, as soon as practicable after the Closing Date, such data, records, documentation and information relating to Company employees and their participation in any Astral Benefit Plan as the Purchaser may reasonably require for the administration of claims under the Purchaser Benefit Plans.

(f) Notwithstanding any other provisions in this Agreement, Bell shall, if requested by the Purchaser, permit the Company employees (and their eligible spouses, beneficiaries and dependents) to continue to participate in and receive benefits under certain Astral Benefit Plans for a transitional period following the Closing Date on the terms and subject to the conditions to be agreed upon by Bell and the Purchaser.

(g) For the purposes of this Section 9.6, the term “incurred” means, in relation to claims under Astral Benefit Plans or Purchaser Benefit Plans, the date on which the event giving rise to such claim occurred and, in particular: (i) with respect to a death or dismemberment claim, shall be the date of the death or dismemberment; (ii) with respect to a short-term or long-term disability claim, shall be the date of occurrence of the initial inquiry or accident or the date of diagnosis of the initial illness giving rise to the claim; (iii) with respect to an extended health care claim, including, without limitation, dental and medical treatments, shall be the date of the treatment; and (iv) with respect to a prescription drug or vision care claim, the date that the prescription was filled.

9.7 Pension Plans

(a) Effective as of the Closing Time, each Company employee who is a member of the Astral Pension Plan shall cease to participate in and accrue benefits under the Astral Pension Plan, and shall commence participation in the Purchaser Benefit ABRIDGED - 35 -

Plans for service with the Company as of the day immediately following the Closing Date.

(b) The Parties shall cause the Company to cease participation in the Astral Pension Plan effective as of a date prior to the Closing Time, without any further liabilities or obligations on the Company under, to, or in respect of the Astral Pension Plan as of the date of such termination of participation.

(c) Bell shall assume and remain responsible for any liabilities and obligations of the Company as a participating employer in the Astral Pension Plan, including any liability or responsibility for any Pension Plan Unfunded Liability, from and after the date of the Company’s participation in the Astral Pension Plan.

9.8 Restriction on Sale

(a) The Purchaser and Purchaser Parent shall not, and shall cause their Affiliates to not, at any time prior to the [Redacted] anniversary of the Closing Date, sell, directly or indirectly, or grant any right or option to any Person to acquire, or take any action (including the issuance of shares) that would cause any Person to control (i) any of the Company Shares, the HoldCo Shares, or the shares of HoldCo 2 or (ii) any of the Channels (the “Restricted Assets”), other than with the consent of Bell.

(b) [Redacted] [The redacted information relates to circumstances in which the covenants in Section 9.8(a) may be modified.]

9.9 Waiver of Rights of First Refusal

If prior to the Closing, this Agreement is terminated by either Party in accordance with Sections 11.1(b), 11.1(c) or 11.1(f), the Purchaser agrees that it shall (a) waive its rights under Section 5.7 of the Shareholders Agreement, and any other rights of first refusal or any similar rights, including any rights of first offer, it may have with respect to the sale by Bell or any of its Affiliates of the Company Shares or the HoldCo Shares pursuant to a binding written agreement executed by Bell or any of its Affiliates and another Person not later than 18 months after the ABRIDGED - 36 - date of termination of this Agreement, and (b) consent to Bell’s disclosure of confidential information relating to the Company, HoldCo and HoldCo 2 to potential purchasers of the Company Shares or the HoldCo Shares, subject to such potential purchasers entering into confidentiality agreements with Bell restricting their disclosure of such confidential information on terms substantially similar to those set forth in Sections 9.10(b) and 9.10(c).

9.10 Confidentiality

(a) Subject to Section 12.1, the Parties agree that each of them shall maintain the confidentiality of all matters relating to the subject matter of this Agreement and the process relating to this Agreement except with the consent of the other Party.

(b) Subject to Section 9.10(c), after the Closing, Bell shall, and shall cause its Affiliates to, keep confidential all information relating to the Company, HoldCo and HoldCo 2, except information which:

(i) is generally available to the public other than as a result of a breach of this Agreement by Bell;

(ii) was received in good faith by Bell after the Closing from a non-Affiliated Person who was lawfully in possession of such information and free of any obligation of confidentiality; or

(iii) is released from the provisions of this Agreement by the written authorization of the Purchaser.

(c) If Bell or any of its Affiliates is requested pursuant to, or required by, applicable law or legal process to disclose any confidential information, Bell may make such disclosure, but must first provide the Purchaser with prompt notice of such request or requirement, unless notice is prohibited by law, in order to enable the Purchaser to seek an appropriate protective order or other remedy.

9.11 [Redacted]

[The redacted information relates to the treatment of Company employees after the Closing.] ABRIDGED - 37 -

9.12 Cash Distribution

The Parties agree that Bell and the Purchaser shall (a) cause the Company, HoldCo and HoldCo 2 to declare and pay dividends or otherwise make payments or distributions of cash in respect of its shares in accordance with past practice, and (b) notwithstanding the foregoing, cause the Company, to declare and pay a dividend or otherwise make a payment or distribution of cash in respect of its shares immediately prior to the Closing Time, and for the avoidance of doubt, immediately prior to any calculation of Closing Working Capital, in an amount equal to substantially all of the cash on hand at the time of such dividend, payment or distribution, in each case subject to applicable corporate law.

9.13 Books and Records

All Books and Records of the Company, HoldCo and HoldCo 2 in the possession or control of Bell shall be delivered to the Purchaser on or prior to the Closing Date.

9.14 Notice of Untrue Representation or Warranty

Bell shall notify the Purchaser promptly upon any representation or warranty made by it pursuant to ARTICLE 4 becoming incorrect prior to Closing. The Purchaser shall notify Bell promptly upon any representation or warranty made by it pursuant to ARTICLE 5 (other than the representations and warranties made pursuant to Section 5.6(b) or Section 5.6(c)) becoming incorrect prior to Closing. With respect to the representations and warranties made by the Purchaser pursuant to Section 5.6(b) or Section 5.6(c), the Purchaser shall notify Bell promptly upon such representation and warranty becoming incorrect in any material respect prior to Closing; provided that the Purchaser shall have no liability for any failure to notify Bell of any representation or warranty made pursuant to Section 5.6(b) or Section 5.6(c) becoming incorrect. For the purposes of this Section 9.14, unless otherwise specified, each representation and warranty shall be deemed to be given at and as of all times from the date of this Agreement to the Closing Date. Any such notice shall set out particulars of the untrue or incorrect representation or warranty and details of any actions being taken by Bell or the Purchaser, as the case may be, to rectify the incorrectness. No such notice will relieve either Party of any right or remedy provided for in this Agreement. ABRIDGED - 38 -

9.15 Cooperation regarding reorganization

(a) Not later than thirty days after the date of this Agreement, Bell shall deliver to the Purchaser a reasonably detailed summary plan with respect to any contemplated reorganization with respect to the transfer of the Company Shares and the HoldCo Shares including to an Affiliate of Bell which could be a newly formed corporation (“NewHoldco”) or partnership (the “Contemplated Reorganization Transaction”), and as part of such summary plan, Bell may elect, in its reasonable discretion, to sell to Purchaser all of the issued and outstanding shares of NewHoldco. The Purchaser shall, and shall cause each of the Company, HoldCo and HoldCo 2 to, reasonably cooperate with Bell in connection with the Contemplated Reorganization Transaction, including with respect to structuring and preparing any reorganization (including for Tax purposes) of their respective capital, assets and corporate structure, any transfer or redemption of shares of their respective capital or the payment of such dividends, as Bell may reasonably require, and to use its commercially reasonable efforts to implement any such Contemplated Reorganization Transaction prior to the closing of the Astral Arrangement or prior to the Closing, as Bell may reasonably require; provided, however, such requested cooperation does not unreasonably interfere with the ongoing operations of the Company, HoldCo or HoldCo 2. In addition, if Bell elects, in accordance with this Section 9.15, to sell to Purchaser the shares of NewHoldco, the Parties agree to cooperate and take all necessary actions to implement such transaction, including making all necessary amendments to this Agreement.

(b) If Bell elects, in accordance with this Section 9.15, to sell to Purchaser the shares of NewHoldco, Bell shall be responsible for and shall indemnify the Purchaser for 100% of the Taxes payable by NewHoldco for periods or portions of periods ending on or prior to the Closing Date.

(c) No aspects of the Contemplated Reorganization Transactions will be effected until such time as the Parties agree, acting reasonably, that the Astral Arrangement is likely to be completed. Bell shall pay the implementation costs ABRIDGED - 39 -

and any direct or indirect costs and liabilities, fees, damages, penalties, Taxes, Claims and other amounts that may be incurred as a consequence of the implementation of or to unwind, any such Contemplated Reorganization Transaction, including actual out-of-pocket costs and expenses for filing fees and external counsel and auditors which may be incurred.

(d) The Purchaser shall have the right to review and comment on all agreements, contracts, certificates, resolutions and other documents in connection with the Contemplated Reorganization Transaction, and in any event, the Contemplated Reorganization Transaction shall be satisfactory to the Purchaser, acting reasonably and shall have no adverse effects on the Purchaser, the Company, HoldCo or HoldCo 2, or any of their respective Affiliates.

9.16 Termination and Mutual Release Agreement

During the period between the date of this Agreement and the Closing Date, Bell shall, and the Purchaser Parent shall cause its Affiliates that are parties to the Shareholders’ Agreement to, negotiate in good faith with a view to, concurrently with the Closing, entering into an agreement terminating the Shareholders Agreement and providing a mutual release with respect to any surviving obligations thereunder.

9.17 Section 256(9) Election

Bell and the Purchaser covenant and agree to make the election under subsection 256(9) of the Income Tax Act (Canada) such that the acquisition of control of HoldCo, HoldCo 2, the Company and NewHoldco shall be deemed to have occurred at the Closing Time, and not at the beginning of the Closing Date. Bell and the Purchaser covenant and agree that this election shall be made in the tax return of HoldCo, HoldCo 2, the Company and NewHoldco for the taxation year ending immediately before the Closing Time. ABRIDGED - 40 -

ARTICLE 10 INDEMNIFICATION

10.1 Indemnification by Bell

(a) Bell shall indemnify and save harmless the Purchaser, its directors, officers, agents, employees and shareholders (collectively referred to as the “Purchaser Indemnified Parties”), from and against all Claims, whether or not arising due to third party Claims, which may be made or brought against the Purchaser Indemnified Parties, or which they may suffer or incur, directly or indirectly, as a result of or in connection with or relating to:

(i) any non-fulfilment or breach of any covenant or agreement on the part of Bell contained in this Agreement or in any certificate or other document furnished by or on behalf of Bell pursuant to this Agreement, including the Contemplated Reorganization Transaction; or

(ii) any misrepresentation or any incorrectness in or breach of any representation or warranty of Bell contained in this Agreement or in any certificate or other document furnished by or on behalf of Bell pursuant to this Agreement, except for any misrepresentation or any incorrectness in or breach of any representation or warranty of Bell to the extent disclosed by Bell in the officer’s certificates provided in accordance with Section 7.1 in sufficient detail and context to allow the Purchaser to assess the impact of such Claim prior to the Closing Date, and for the avoidance of doubt, any such disclosure in such officer’s certificate shall cause the condition set forth in Section 7.1 not to be satisfied.

(b) Bell’s obligations under Section 10.1(a) shall be subject to the following limitations:

(i) subject to Section 10.1(c), the obligations of Bell under Section 10.1(a)(ii) shall terminate on the date that is 18 months from the Closing Date except with respect to bona fide Claims by Purchaser Indemnified Parties set ABRIDGED - 41 -

forth in written notices given by a Purchaser Indemnified Party to Bell prior to such date;

(ii) for Claims made under Section 10.1(a)(ii), Bell shall not be required to pay any amount until the aggregate of all Claims exceeds $1,000,000 and upon the aggregate of all Claims exceeding $1,000,000 Bell shall be required to pay the amount owing in respect of all such Claims including the $1,000,000; provided, however, in no event shall Bell be required to pay any amount for Claims made under Section 10.1(a)(ii) (other than Claims made with respect to the Vendor’s Core Representations) in excess of $93,375,000 or in excess of $249,000,000 with respect to Claims against Bell for the misrepresentation, incorrectness or breach of any of the Vendor’s Core Representations, except that the foregoing limitations shall not apply to wilful breaches of this Agreement by Bell or fraud of Bell.

(c) the obligations of Bell under Section 10.1(a) with respect to:

(i) any Claims under Section 10.1(a)(i);

(ii) any Claims based on any breach of the Vendor’s Core Representations; or

(iii) any Claims based on intentional misrepresentation or fraud by Bell or any Person acting for or on behalf of Bell; shall survive indefinitely.

(d) notwithstanding anything to the contrary in this Agreement, the Claims incurred by the Purchaser Indemnified Parties arising out of or relating to any misrepresentation, incorrectness or breach of any representation or warranty of Bell contained in Sections 4.9 and 4.10 shall be limited to, and shall not, exceed, 50% of the Claims incurred by the Purchaser Indemnified Parties arising out of or relating to such inaccuracy or breach of any such representation or warranty. ABRIDGED - 42 -

10.2 Indemnification by the Purchaser

(a) The Purchaser shall indemnify and save harmless Bell, its directors, officers, agents, employees and shareholders (collectively referred to as the “Bell Indemnified Parties”), from and against all Claims, whether or not arising due to third party Claims, which may be made or brought against Bell Indemnified Parties, or which they may suffer or incur, directly or indirectly as a result of or in connection with or relating to:

(i) any non-fulfilment or breach of any covenant or agreement on the part of the Purchaser contained in this Agreement or in any certificate or other document furnished by or on behalf of the Purchaser pursuant to this Agreement, other than any covenant contained in Section 9.14 to the extent related to, or in connection with, either of Sections 5.6(b) or 5.6(c); or

(ii) any misrepresentation or any incorrectness in or breach of any representation or warranty of the Purchaser contained in this Agreement or in any certificate or other document furnished by or on behalf of the Purchaser pursuant to this Agreement, other than the representations and warranties contained in Sections 5.6(b) and 5.6(c) (except to the extent of any intentional misrepresentation with respect to Section 5.6(b) and 5.6(c) by the Purchaser or fraud of the Purchaser with respect to Section 5.6(b) and 5.6(c)).

(b) The Purchaser’s obligations under Section 10.2(a) shall be subject to the following limitations:

(i) subject to Section 10.2(c), the obligations of the Purchaser under Section 10.2(a)(ii) shall terminate on the date that is 18 months from the Closing Date except with respect to bona fide Claims by Bell Indemnified Parties set forth in written notices given by a Bell Indemnified Party to the Purchaser prior to such date; ABRIDGED - 43 -

(ii) for Claims made under Section 10.2(a)(ii), the Purchaser shall not be required to pay any amount until the aggregate of all Claims exceeds $1,000,000 and upon the aggregate of all Claims exceeding $1,000,000 the Purchaser shall be required to pay the amount owing in respect of all such Claims including the $1,000,000; provided, however, in no event shall the Purchaser be required to pay any amount for Claims made under Section 10.2(a)(ii) (other than Claims made with respect to Section 5.1 (Status of the Purchaser) and 5.2 (Due Authorization and Enforceability)) in excess of $93,375,000 or in excess of $249,000,000 with respect to Claims against the Purchaser for the misrepresentation, incorrectness or breach of any of the representations set out in Sections 5.1 (Status of the Purchaser) and 5.2 (Due Authorization and Enforceability), except that the foregoing limitations shall not apply to wilful breaches of this Agreement by the Purchaser or fraud of the Purchaser.

(c) the obligations of the Purchaser under Section 10.2(a) with respect to:

(i) any Claims under Section 10.2(a)(i);

(ii) any Claims based on any incorrectness in or breach of the representations and warranties set out in Sections 5.1 (Status of the Purchaser) and 5.2 (Due Authorization and Enforceability); or

(iii) any Claims based on intentional misrepresentation or fraud by the Purchaser or any Person acting on behalf of the Purchaser; shall survive indefinitely , and any Claims based on any incorrectness in or breach of the representations and warranties set out in Section 5.6(a) shall survive for a period of 30 Business Days after the expiration of the last of the limitation periods contained in the Income Tax Act and any other applicable legislation imposing Tax subsequent to the expiration of which an assessment, reassessment or other form of recognized document assessing liability for Tax cannot be issued, except with respect to any bona fide Claims by Bell Indemnified Parties set forth in written notices given by a Bell Indemnified Party to the Purchaser prior to such date. ABRIDGED - 44 -

10.3 Indemnification Procedures for Third Party Claims

(a) In the case of Claims made by a third party with respect to which indemnification is sought, the Party seeking indemnification (the “Indemnified Party”) shall give prompt notice, and in any event within 20 days, to the other Party (the “Indemnifying Party”) of any such Claims made upon it. If the Indemnified Party fails to give such notice, such failure shall not preclude the Indemnified Party from obtaining such indemnification but its right to indemnification may be reduced to the extent that such delay materially prejudiced the defence of the Claim or materially increased the amount of liability or cost of defense.

(b) The Indemnifying Party shall have the right, by notice to the Indemnified Party given not later than 30 days after receipt of the notice described in Section 10.3(a), to assume the control of the defence, compromise or settlement of the Claim, provided that such assumption shall, by its terms, be without cost to the Indemnified Party and provided the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party in accordance with the terms contained in this Section in respect of that Claim.

(c) Upon the assumption of control of any Claim by the Indemnifying Party as set out in Section 10.3(b), the Indemnifying Party shall diligently proceed with the defence, compromise or settlement of the Claim at its sole expense, including if necessary, employment of counsel and experts reasonably satisfactory to the Indemnified Party and, in connection therewith, the Indemnified Party shall cooperate fully, but at the expense of the Indemnifying Party with respect to any out-of-pocket expenses incurred, to make available to the Indemnifying Party all pertinent information and witnesses under the Indemnified Party’s control, make such assignments and take such other steps as in the opinion of counsel for the Indemnifying Party are reasonably necessary to enable the Indemnifying Party to conduct such defence. The Indemnified Party shall also have the right to participate in the negotiation, settlement or defence of any Claim at its own expense. ABRIDGED - 45 -

(d) The final determination of any Claim pursuant to this Section 10.3, including all related costs and expenses, shall be binding and conclusive upon the Parties as to the validity or invalidity, as the case may be, of such Claim against the Indemnifying Party.

(e) If the Indemnifying Party does not assume control of a Claim as permitted in Section 10.3(b), the Indemnified Party shall be entitled to make such settlement of the Claim as in its sole discretion may appear advisable, and such settlement or any other final determination of the Claim shall be binding upon the Indemnifying Party.

10.4 Tax Status of Indemnification Payments

Any payment made by Bell pursuant to this ARTICLE 10 shall constitute a reduction of the Purchase Price and any payment made by the Purchaser pursuant to this ARTICLE 10 shall constitute an increase in the Purchase Price. In either case, each of Bell and the Purchaser shall, within a reasonable time of payment and receipt of such payment, as applicable, and in any event within two months of such payment, request all amendments to its current or past Tax Returns as may be necessary to reflect the foregoing.

10.5 Additional Limitations

Notwithstanding any other Section in this ARTICLE 10, neither Party shall be liable for any exemplary or punitive damages (except for any such damages actually paid by the Indemnified Parties to any third party in respect of any third party Claim).

10.6 Exclusive Remedy

Following the Closing, the rights of indemnity set forth in this ARTICLE 10 are the sole and exclusive remedy of each Party in respect of any misrepresentation, incorrectness in or breach of any representation or warranty by the other Party under this Agreement, other than such misrepresentation, incorrectness or breach arising as a result of, in connection with, or with respect to, any fraud or wilful misconduct. ABRIDGED - 46 -

ARTICLE 11 TERMINATION

11.1 Termination

This Agreement may be terminated at any time prior to the Closing:

(a) by the mutual written consent of Bell and the Purchaser;

(b) by either Bell or the Purchaser if the Closing shall not have occurred by the date that is the one year anniversary of the date hereof (as such date may be postponed as set forth below, the “Outside Date”), provided that if on the day that is at least five days before the Outside Date, the application for CRTC Approval remains pending, but either Party reasonably believes that CRTC Approval is reasonably capable of being obtained on or prior to the date that is three months after the Outside Date and all other conditions set forth in ARTICLE 7 and ARTICLE 8 (other than those capable of being satisfied at the Time of Closing only) have been satisfied, then either Party shall have the right to postpone the Outside Date to the date that is three months after the Outside Date, upon written notice to the other Party prior to 5:00 pm ET on the day that is at least one day before the Outside Date; provided that the Outside Date shall not be extended beyond the date that is 15 months from the date hereof and the right to terminate this Agreement pursuant to this Section 11.1(b) shall not be available to any Party whose failure to fulfill any obligations under this Agreement shall have been the primary cause of, or shall have resulted in the failure of the Closing to occur on or prior to the Outside Date;

(c) by Bell if (i) the CRTC Approval is denied, (ii) the Competition Act Approval has not been obtained on or before the closing of the Astral Arrangement, or (iii) the Commissioner of Competition indicates in writing that he objects to the transaction provided for in this Agreement; provided that the right to terminate this Agreement pursuant to this Section 11.1(c) shall not be available to Bell if its failure to fulfill any obligations under this Agreement shall have been the primary ABRIDGED - 47 -

cause of, or shall have resulted in the either the CRTC Approval being denied or the failure to obtain Competition Act Approval;

(d) by Bell if it is not required to divest the Channels by the CRTC and pursuant to the Competition Act in connection with the Astral Arrangement;

(e) by the Purchaser if (i) Bell is in breach of any representation, warranty, covenant, obligation or other provision of this Agreement; (ii) the Purchaser has provided written notice to Bell of such breach; (iii) such breach has not been waived or cured (or is not capable of being cured) by the earlier of the day prior to the Outside Date and 15 Business Days following the date on which the Purchaser notifies Bell of such breach; (iv) such breach, if not waived or cured in accordance with clause (iii) above (or is not capable of being cured), would render any condition set forth in ARTICLE 7 incapable of being satisfied; and (v) the Purchaser is not then in breach of this Agreement so as to directly or indirectly cause any of the conditions set forth in ARTICLE 8 not to be satisfied;

(f) by Bell if (i) the Purchaser is in breach of any representation, warranty, covenant, obligation or other provision of this Agreement; (ii) Bell has provided written notice to the Purchaser of such breach; (iii) such breach has not been waived or cured (or is not capable of being cured) by the earlier of the day prior to the Outside Date and 15 Business Days following the date on which Bell notifies the Purchaser of such breach; (iv) such breach, if not waived or cured in accordance with clause (iii) above (or is not capable of being cured), would render any condition set forth in ARTICLE 8 incapable of being satisfied; and (v) Bell is not then in breach of this Agreement so as to directly or indirectly cause any of the conditions set forth in ARTICLE 7 not to be satisfied; or

(g) by either Party if the BCE-Astral Agreement is terminated for any reason prior to the completion of the Astral Arrangement.

11.2 Effect of Termination

Each Party’s right of termination under Section 11.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an ABRIDGED - 48 -

election of remedies. If this Agreement is terminated pursuant to Section 11.1, all further obligation of the Parties under this Agreement will terminate, except that the provisions of ARTICLE 1, Section 9.9, Section 9.10, Section 11.2, Section 11.3, Section 11.4 and ARTICLE 12 shall survive; provided, however, that if this Agreement is terminated by the Purchaser pursuant to Section 11.1(e) or by Bell pursuant to Section 11.1(f), the terminating party’s right to pursue all legal remedies with respect to such breach that gave rise to the right of termination pursuant to Section 11.1(e) or 11.1(f) will survive such termination unimpaired.

11.3 [Redacted]

[The redacted information relates to the payment of fees related to regulatory outcomes.]

11.4 Indemnity Payment

(a) In the event that this Agreement is terminated pursuant to Section 11.1(b), at a time when the condition set forth in Section 8.5 is not satisfied, or pursuant to Section 11.1(c), and Bell has delivered to the Purchaser a written notice signed by an executive officer of Bell stating that Bell is ready, willing and able in good faith to close the transactions contemplated by this Agreement and would do so but for the unfulfilled condition in Sections 8.5 or 8.6, and the Purchaser is not otherwise entitled to terminate this agreement under Section 11.1(e) (without regard to the cure periods), the Purchaser shall indemnify Bell and be required to pay to Bell, promptly upon completion of a direct or indirect sale of the Company Shares and the HoldCo Shares by Bell to a subsequent third party purchaser in order to satisfy a condition attached to the regulatory approvals obtained in connection with the Astral Arrangement, (such sale, a “Subsequent Transaction”), an amount equal to (i) the net aggregate proceeds that would have been received had the transactions contemplated by this Agreement been completed, less (ii) the net aggregate proceeds that Bell later receives in the applicable Subsequent Transaction (taking into account adjustments related to the Working Capital and the actual working capital delivered to the purchaser in the Subsequent Transaction, or similar adjustments, but not any indemnity payments made by Bell to a potential acquiring entity). For greater certainty and without limiting the foregoing, the Purchaser’s indemnity hereunder shall apply regardless ABRIDGED - 49 -

of the process leading to a Subsequent Transaction being conducted by Bell or a Divestiture Trustee (as such term is defined in the Consent Agreement), or any other person appointed by the Commissioner of Competition pursuant to the Consent Agreement.

(b) Until expiry of the Initial Sale Period (as such term is defined in the Consent Agreement) and the appointment of a Divestiture Trustee pursuant to the Consent Agreement, the terms described in this Section 11.4(b) shall apply with respect to any requirement for any Subsequent Transaction. After consultation with the Purchaser and taking into account the Purchaser’s views, Bell shall retain, at the Purchaser’s costs, reputable investment bankers, on customary terms for a transaction of this type, including customary fees and disbursements, to conduct a full auction process with respect to any Subsequent Transaction. Bell shall keep the Purchaser fully informed as to any sale process in respect of any Subsequent Transaction, including by providing it with all material written correspondence between Bell and any potential acquiring entity. The Purchaser shall have reasonable access to such investment bankers throughout the auction process and Bell shall consider in good faith any of the Purchaser’s requests and comments with respect to the auction process and the ensuing negotiations with the bidders, including with respect to the selection of the proposed acquiror. Bell shall use its reasonable best efforts to obtain the most favourable terms as a result of such auction process and ensuing negotiations, and in determining such favourable terms shall take into account the ability of a potential acquiror to consummate any Subsequent Transaction and the total consideration payable by the potential acquiror. For greater certainty, Bell shall have complete discretion in selecting the potential acquiror; provided that if the Purchaser does not agree with Bell’s proposed selection (which disagreement the Purchaser shall have expressed to Bell in writing within five Business Days of Bell’s request in that regard), and Bell does not select the potential acquiror offering the highest price, the indemnity provided for in the previous paragraph shall be reduced by an amount equal to the difference between (i) the net aggregate proceeds that Bell would have received if it had selected the potential acquiror offering the highest price, and (ii) the net aggregate proceeds that Bell receives in the Subsequent Transaction. ABRIDGED - 50 -

ARTICLE 12 GENERAL

12.1 Public Notices

The Parties shall jointly plan and co-ordinate any public notices, press releases, and any other publicity concerning the transactions contemplated by this Agreement and no Party shall act in this regard without the prior approval of the other, such approval not to be unreasonably withheld; provided, however, each Party shall have the right to issue a press release (or such other public announcement) announcing the execution of this Agreement and its principal commercial terms shortly following execution of this Agreement, such press release (or other public announcement) to be provided in draft form to the other Party in advance in order to provide a reasonable opportunity to comment. A copy of this Agreement may be filed with a Governmental Authority to the extent that a Party concludes, acting reasonably, that it is obligated to do so under Law.

12.2 Expenses

Except as otherwise provided in this Agreement each Party shall pay all costs and expenses (including the fees and disbursements of legal counsel and other advisers) it incurs in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated by this Agreement.

12.3 Notices

Any notice, consent or approval required or permitted to be given in connection with this Agreement (in this Section 12.3 referred to as a “Notice”) shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery): ABRIDGED - 51 -

(a) in the case of a Notice to the Purchaser at:

c/o Corus Entertainment Inc. Corus Quay 25 Dockside Drive Toronto, ON M5A 0B5

Attention: Gary A. Maavara

With a copy to:

Osler, Hoskin & Harcourt LLP 1 First Canadian Place, Suite 6100 Toronto, Ontario M5X 1B8

Attention: Douglas A. and Terry Burgoyne

(b) in the case of a Notice to Bell at:

Bell Media Inc. 299, rue Queen Ouest Toronto, ON M5V 2Z5

Attention: Corporate Secretary

With a copy to:

Bell Canada 1, Carrefour Alexander-Graham-Bell, Building A7 Verdun, QC H3E EB3 Attention: Corporate Secretary

Any Notice delivered or transmitted to a Party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if the Notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a Business Day then the Notice shall be deemed to have been given and received on the next Business Day.

Any Party may, from time to time, change its address by giving Notice to the other Parties in accordance with the provisions of this Section. ABRIDGED - 52 -

12.4 Assignment

Neither party may assign this Agreement or any of the benefits, rights or obligations under this Agreement without the prior written consent of the other Party; provided that Bell may, as part of its Contemplated Reorganization Transaction, assign all of its rights, interests and obligations under this Agreement to any Affiliate of Bell without the Purchaser’s prior written consent, but Bell shall not be relieved of its obligations under this Agreement, and any reference in this Agreement to “Bell” shall be deemed to include the assignee.

12.5 Enurement

This Agreement enures to the benefit of and is binding upon the Parties and their respective successors (including any successor by reason of amalgamation of any Party) and permitted assigns.

12.6 Amendment

No amendment, supplement, modification or waiver or termination of this Agreement and, unless otherwise specified, no consent or approval by any Party, is binding unless executed in writing by the Party to be bound thereby.

12.7 Further Assurances

The Parties shall, with reasonable diligence, do all such things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each Party shall provide such further documents or instruments required by any other Party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions, whether before or after the Closing.

12.8 Submission to Jurisdiction

(a) Each Party submits to the exclusive jurisdiction of any Ontario courts sitting in Toronto in any action, application, reference or other proceeding arising out of or relating to this Agreement and consents to all claims in respect of any such action, application, reference or other proceeding being heard and determined in such Ontario courts. Each of the Parties irrevocably waives, to the fullest extent it may ABRIDGED - 53 -

effectively do so, the defence of an inconvenient forum to the maintenance of such action, application or proceeding. Each Party consents to any action, application, reference or other proceeding arising out of or relating to this Agreement being tried in Toronto and, in particular, being placed on the Commercial List of the Ontario Superior Court of Justice.

(b) The Parties shall not raise any objection to the venue of any action, application, reference or other proceeding arising out of or relating to this Agreement in the Ontario Courts sitting in Toronto, including the objection that the proceedings have been brought in an inconvenient forum.

(c) A final judgment in any such action, application or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner specified by law.

12.9 Execution and Delivery

This Agreement may be executed by the Parties in counterparts and may be executed and delivered by facsimile or electronic transmission and all such counterparts and facsimiles or electronic copies together constitute one and the same agreement.

12.10 Guarantee by Purchaser Parent

Purchaser Parent hereby unconditionally guarantees to Bell the timely payment and performance by the Purchaser of the Purchaser’s obligations under this Agreement, and agrees to cause the Purchaser to perform all of its obligations under this Agreement.

[Remainder of Page Intentionally Blank] ABRIDGED

IN WITNESS OF WHICH the Parties have executed this Agreement.

8324441 CANADA INC.

By: “John Cassaday” Name: John Cassaday Title: Director

By: “Tom Peddie” Name: Tom Peddie Title: Director

CORUS ENTERTAINMENT INC.

By: “John Cassaday” Name: John Cassaday Title: President and Chief Executive Officer

By: “Tom Peddie” Name: Tom Peddie Title: Executive Vice President and Chief Financial Officer

BELL MEDIA INC.

By: “Kevin Crull” Name: Kevin Crull Title: President

[Signature Page to Purchase Agreement – Teletoon] ABRIDGED ABRIDGED ABRIDGED ABRIDGED APPENDIX 5 Financial Statements ABRIDGED ABRIDGED Appendix 5 Copy of Teletoon F2012 Financials Abridged.xls Income Statement CONSOLIDATED STATEMENTS OF EARNINGS FOR THE PERIOD ENDED 31-08-12 (in thousands)

YEAR TO DATE Actual Last year

Revenues from Operations External 101 Revenue - Cable $44,152 $45,563 102 Revenue - Advertising 55,416 58,510 103 Revenue - Miscellaneous 47 217 104 Revenue 4 105 Revenue 5 106 Revenue 6 ------107 Total External Revenues 99,615 104,290

------110 TOTAL REVENUES 99,615 104,290

Operating expenses 111 Cost of Sales - Canadian 21,659 19,647 112 Cost of Sales - Foreign 15,730 15,086 113 Programming & Technical 5,865 5,988 114 Selling & Marketing 10,321 11,058 115 Administrative 5,089 5,464 ------120 Total Operating Expenses 58,664 57,243

130 EBITDA 40,951 47,047 EBITDA margin 41.1% 45.1%

Depreciation & amortization 131 Depreciation of fixed assets 140 119 132 Amortization 68 75 ------140 Total depreciation & amortization 208 194

150 Mgmt earnings bef. int.& taxes (MEBIT) 40,743 46,853

Interest 151 External (49) (297) 152 Internal ------155 Total Interest (49) (297)

160 Mgmt earnings bef. taxes (MEBT) 40,694 46,556

Statutory income and expenses 161 Dividend income 162 Statutory interest, net 163 Share of equity earnings 164 Non-controlling interest 165 Tax on Capital / CRTC (11) 166 Management Fees - ATN ------170 Total (11)

180 Statutory earnings bef. taxes (SEBT) 40,694 46,545 181 Provision for income taxes (10,994) (13,442) ------190 Net earnings, statutory 29,700 33,103 Page 1 of 3 ======ABRIDGED Appendix 5 Copy of Teletoon F2012 Financials Abridged.xls Balance Sheet CONSOLIDATED STATEMENTS OF EARNINGS FOR THE PERIOD ENDED 31-08-12 (in thousands)

2012 2011 August August

ASSETS Current 201 Cash and short-term investments $10,779,738 $5,704,454 202 Accounts receivables-trade 19,117,221 19,982,890 203 Accounts receivables-intercompany 170,804 124,451 205 Program and film rights 28,706,903 27,540,780 206 Prepaids and other receivables 23,717,389 22,432,378 ------210 Total Current Assets 82,492,055 75,784,953

211 Program and rights 32,402,692 32,772,121 212 Loans receivables-affiliates 213 Advances to (from)-affiliates 214 Investments 274,906 216 Fixed assets 566,090 584,131 217 Broadcast licences 219 Future Income Tax - Asset 221,090 221,090 ------220 Total assets 115,956,833 109,362,295 ======LIABILITIES Current 252 Accounts payable 628,180 1,214,369 253 Accrued liabilities 560,809 5,028,225 254 Provisions 255 Accounts payable-affiliates 10,644,665 4,381,266 256 Program exhibition rights payable 12,587,610 15,899,434 257 Long-term debt due within one year ------260 Total Current Liabilities 24,421,264 26,523,294

262 Program exibition rights payable 529,887 87,859 263 Loans payable-affiliates 264 Long-term debt 265 Non-controlling interest 266 Other liabilities ------270 Total Liabilities 24,951,151 26,611,153 ------SHAREHOLDERS' EQUITY 281 Capital stock 2,000,000 2,000,000 282 Retained earnings, opening 80,752,320 69,703,887 190 Net earnings for the period 29,699,542 33,102,687 284 Dividends (21,446,180) (22,055,432) ------290 Total Shareholders Equity 91,005,682 82,751,142 ------295 Total liabilities & shareholders equity 115,956,833 109,362,295 ======Page 2 of 3 ABRIDGED Appendix 5 Copy of Teletoon F2012 Financials Abridged.xls Cash Flow CONSOLIDATED STATEMENTS OF EARNINGS FOR THE PERIOD ENDED 31-08-12 (in thousands)

YTD Actual

CASH PROVIDED BY (USED FOR): OPERATING OPERATIONS 190 Net earnings, statutory $29,700 131 Depreciation of fixed assets 209 163 Share of equity earnings 302 (Gain) loss on sale of fixed assets 164 Non-controlling interest ------310 Cash flow from operations 29,909 ------320 Change in non-cash operating items Account receivable - trade 1,371 Accounts receivable - affiliates (47) Program and film rights (797) Prepaids (1,788) Accounts payable (586) Accounts payable - affiliates 6,264 Accrued liabilities (4,467) Provisions Program exhibition rights payable (2,870) Long term debt less than a year ------330 Cash flow from operating activities 26,989 ------INVESTING 331 Addition to fixed assets (148) 332 Proceeds from sale of fixed assets 335 (Inc.) dec. in investments 336 (Inc.) dec. in other assets 337 (Inc.) dec. in broadcast licences 338 (Inc.) dec. in goodwill 339 R/E adjustments ------340 Investing (148) ------FINANCING ACTIVITIES 341 Inc. (dec.) in bank indebtedness 342 Inc. (dec.) in loans - affiliates 343 Inc. (dec.) in advances to (from) - affiliates 344 Change in long-term debt 345 Change in other liabilities 346 Increase in capital stock 347 Dividends paid (21,446) ------350 Financing activities (21,446) ------360 Increase (decrease) in cash 5,395 ------Check 5,077 Page 3 of 3 Via GCKey

June 12th, 2013

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2

Dear Mr. Traversy:

Re: TELETOON Canada Inc. – Various undertakings – Transfer of Shares and Acquisition of assets - Change in effective control – Application No: 2013-0596-2 – Response to deficiency letter dated May 28th, 2013

Corus Entertainment Inc. (Corus), on behalf of TELETOON Canada Inc. (TELETOON) hereby provides its response to the Commission’s deficiency letter dated May 28th, 2013.

Corus has filed via GCKey the following documents:

1. Response to deficiency letter dated May 28th, 2013; 2. Appendix A – Revised Appendix 2A – Confidential and Abridged version; 3. Appendix B – Financial Statements as of August 31st, 2012 and interim financial statements as of February 28th, 2013 – Confidential and Abridged versions; 4. Appendix C – Lease details – Confidential and Abridged versions.

Pursuant to sections 31 and 32 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the “Rules”), Corus is designating the financial information in Appendix B and the amounts in Appendix C as confidential.

The sections that have been redacted contain competitively sensitive information whether for the current year or future years that could be detrimental to the licensees involved if released. This information is not otherwise publicly accessible, whether to the Commission or for securities purposes and could if released impact our ability to negotiate similar commercial arrangements. We are also hereby designating as confidential the home addresses of the individual directors and officers of the corporations listed in Appendix A. This request is made to address privacy concerns related to the disclosure of the home addresses, other than the city of residence, of these directors and officers. Abridged versions of both appendices have been provided for the public record.

Corus would be pleased to respond to any questions and would ask that they be directed to the undersigned.

Thank you for your attention to this matter.

Sincerely,

Sylvie Courtemanche Vice President, Government Relations Corus Entertainment Inc.

Attachments

Cc: Marie-Claire Bouthillier, CRTC Kevin Goldstein, Bell Media Inc.

***End of document*** Via GCKey

June 12th, 2013

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2

Dear Mr. Traversy:

Re: TELETOON Canada Inc. – Various undertakings – Transfer of Shares and Acquisition of assets - Change in effective control – Application No: 2013-0596-2 – Response to deficiency letter dated May 28th, 2013

Corus Entertainment Inc. (Corus), on behalf of TELETOON Canada Inc. (TELETOON) hereby provides its response to the Commission’s deficiency letter dated May 28th, 2013.

The Commission’s questions are reproduced below with the Applicant’s response provided in bold.

Ownership Analysis 1. Rationale of the transaction - Paragraph 82 of the supplementary brief indicates how this transaction would benefit TELETOON Canada should the transaction be approved by the Commission. Please indicate why the Commission should view this as a benefit to Canadians and to the Canadian broadcasting system when Corus is already in a position to provide such benefits to TELETOON.

Corus response

In June of 2006 Astral Media Inc. and Corus applied to the Commission for approval to take up 10% each of the voting interest in Teletoon Inc.As a result the voting interest of Astral Media Inc. and Corus would be equal at 50%. 2

The Commission approved the application (Broadcasting Public Notice CRTC 2006-129, 29 September 2006, Appendix 1, item #6) and stated the following:

This transaction does not affect the effective control of Teletoon Inc., which is exercised by its board of directors.

As part of that process, the applicants had filed a Unanimous Shareholder Agreement (USA) dated September 1st, 2006 that was binding upon the signatories which were wholly-owned subsidiaries of either Corus or Astral Media Inc. This agreement formed part of the record of that proceeding. This agreement set out the obligations as between the parties which included pre-emptive rights for each party to have first rights in the event that one party was leaving. In the context of the structure, which requires close cooperation and trust between the equal share owners, this made a great deal of sense. Otherwise one party could be left in a close relationship with a co-owner that it does not know.

The Commission endorsed this with the approval as noted above. In a sense the Commission has already approved the fact that either Corus or Astral could become the whole owner of the company in 2006.

Teletoon Inc. has been operating since 2006 in this cooperative manner with the actual operations of the company being shared between Astral Media Inc. and Corus as service providers while the corporation and its core staff, including the CEO and the board, directed its course. This process is now ending with the sale of Astral Media Inc. As such the services performed by Astral Media Inc. must be replaced. The voting ownership is also changing. It is in the public interest that this be done in the method contemplated by the parties in the USA and which was approved by the Commission at that time.

The public benefit arises from the structural fact that an equal partner should have the right to pick its opposite number. An approval would be in the public benefit as it would clarify the ownership. The inverse of this is that a denial would mean that Corus could face the prospect of a co-owner that it did not pick and which could effectively exercise negative control over the company by refusing to be cooperative in the superlative manner that Corus and Astral Media Inc. have been. BCE Inc. would also be required to find a new purchaser which would take time. We respectfully submit that a further delay would be detrimental to the Teletoon licences, to Corus, and to the public interest. Public markets tend to punish uncertainty.

At this time of great change in our industry, it is not in the public interest to leave such an important group of services which Canadian viewers like, and which contribute greatly to the system in the form of CPE spending and otherwise, with a period of uncertainty that could be months.

It is also in the public interest that Corus and its shareholders be treated fairly and pursuant to an agreement that was reviewed and approved by the Commission seven years ago. 3

2. Current shareholders of TELETOON Canada a) Please confirm staff’s understanding that, "YTV Canada, Inc." (with a comma) should have been referred to as a shareholder of TELETOON Canada instead of "YTV Canada Inc." (no comma). Please note that this entity will be referred to as YTV for the remainder of this letter. In the negative, please file a certificate of amendment.

Corus response

YTV Canada, Inc. is the correct name.

b) In paragraph 2 of the supplementary brief, it is stated that The Family Channel Inc. (Family) holds 50% of the voting shares in TELETOON Canada through wholly owned subsidiaries. The Commission’s records currently show that Family directly and indirectly holds a total of 50% of the voting shares in TELETOON Canada through partly owned subsidiaries. Please clarify and file documentation in support if necessary. The Commission’s ownership charts are available on the Commission’s website.

Corus response

The Commission’s ownership charts are correct.

c) In the cover letter of the TELETOON application, it is stated that "neither Corus nor Astral Media Inc. exercise control over the subject broadcasting undertakings", yet, on paragraph 59, the supplementary brief states that Corus originates the service (and this is further restated in paragraph 173) and that Astral Media provides administrative support. Please clarify.

Corus response

This question involves the separate concepts of ownership control in law and services required to operate the service.

In June of 2006 Astral Media Inc. and Corus applied to the Commission for approval to take up 10% each of the voting interest in Teletoon Inc. As a result the voting interest of Astral Media Inc. and Corus would be equal at 50%.

The Commission approved the application (Broadcasting Public Notice CRTC 2006-129, 29 September 2006, Appendix 1, item #6) and stated the following:

This transaction does not affect the effective control of Teletoon Inc., which is exercised by its board of directors.

The Teletoon Inc. board and its management exercised this control.

It is not unusual for a broadcasting operation to enter into service contracts to accomplish a variety of goals. An obvious example is carriage agreements with 4

Telesat Canada for satellite space to deliver the signal to BDU’s. This of course is done by virtually everyone. A second obvious example is the acquisition of programming from independent producers. Of course the Commission sanctions and mandates this through conditions of licence. There are many other services performed by third parties such as audience measurement, advertising sales, etc.

In the case of Teletoon Inc. the owners agreed that it also made sense to have the company contract out other services to Corus and to Astral Media Inc. Agreements were vetted by the board and by auditors and have operated for years to benefit the service. It is these services that are referred to in the Supplementary Brief at, inter alia, paragraphs 59 and 173. These agreements do not effect legal control but simply relate to operational elements.

So Teletoon uses the Corus Quay physical infrastructure to hold, assemble and deliver the programming in the linear channel form. This is not unusual in the Canadian system. For example, Superchannel is originated by and at Bell facilities in Toronto while the corporate, programming and other functions reside in offices that are in .

3. Transaction steps - Staff notes that the various steps of the transaction involving the shareholders of TELETOON Canada have been summarized in paragraph 10 of the supplementary brief. Yet, this summary does not correspond to the charts presented in paragraph 11. Therefore, please refer to the charts contained in the Appendix to this letter: they correspond to staff’s understanding.

a) Please review staff’s understanding as presented in the Appendix to this letter and comment.

Corus response

We will follow Alternative “A” illustrated in the diagrams following paragraph 11 of the supplementary brief.

b) Please clarify the purpose of the differentiation between TELETOON Amalco and 8324441 Canada Inc. (4441 Inc.) in the supplementary brief.

Corus response

4441 Inc., Teletoon Canada, 6381 Inc. and 4113756 Canada Inc., will amalgamate and continue as Teletoon Amalco. Essentially, Teletoon Amalco will be the successor to 4441 Inc.

b) Please explain why two alternatives have been proposed for this transaction and why a definitive course of action has yet to be decided. 5

Corus response

BCE Inc. initially proposed the two alternatives because it had not yet decided on its disposition strategy at the time of signature of the SPA. As outlined above in reply to question 3(a), BCE Inc. has now indicated that it will follow Alternative “A” illustrated in the diagrams following paragraph 11 of the supplementary brief.

d) Please explain what will happen to Family after its participation in 4116381 Canada Inc. (6381 Inc.) and TELETOON Canada are purchased by 4441 Inc.

Corus response

BCE Inc. has advised Corus that it proposes the following reorganization in respect of Family:

 Family incorporates a new subsidiary (New Family).  Family transfers its assets – other than its shares in Teletoon Canada and 6381 Inc. – to New Family.  The BCE-Astral arrangement closes.  Family is amalgamated with various entities including Bell, to form New Bell Media, and the shares in Teletoon Canada and 6381 Inc. are put in trust with the Astral trustee.  New Bell Media sells the shares in Teletoon Canada and 6381 Inc. to 4441 Inc.

e) Please confirm whether the reorganisation process (shown in step 3 of the appendix to this letter) corresponds to an amalgamation or to a wind-up.

Corus response

The reorganization process corresponds to an amalgamation.

f) Please clarify the process whereby Nelvana Ltd. and YTV will become non- voting shareholders instead of voting shareholders of TELETOON Amalco, e.g. that the voting shares will be sold to Corus or bought back by TELETOON Amalco.

Corus response

On its formation, Teletoon Amalco issues non-voting shares to each of Nelvana Ltd. and YTV, and voting shares to Corus, in place of the shares held by them in the various predecessor corporations before the amalgamation.

4. Involvement of the trustee - Staff notes that a trust will be created in the event the Commission approves the BCE/Astral Arrangement. Yet the role of the trustee is not explained in the BCE/Astral Supplementary brief. Please clarify the trustee’s involvement in: 6

a) the current transactions and

b) contracts / sales agreement or any other proof filed in support of this transaction.

Corus response

At the time of perfecting the agreement between BCE Inc. and Corus, the proposed BCE Inc. trustee had not yet been appointed. At the time of writing of this letter, the Commission has not yet published an approval of the trustee. As such the trustee has not been involved in the process and there is no reason in law for this to occur to date.

Meanwhile the Share Purchase Agreement (SPA) dated March 4th, 2013 expressly contemplates divestiture of this property and the role of a trustee in the preamble D; in the Definitions in Article I (such as “BCE Trust Agreements” and “BCE Trustee”); and in Article 9.2. The SPA expressly provides that the trustee shall have full power and authority in voting the shares.

The trustee would operate according to the terms of the Voting Trust Agreement filed by BCE Inc. on January 31st, 2013 to which is appended the affidavit of Pierre Boivin, dated December 3rd, 2012.

5. Possible future reorganisation – Paragraph 95 of the supplementary brief indicates that should the Commission approve the TELETOON application, "that it be mindful that Corus intends to align these services within its existing group of services". Please comment in detail with specific reference to:

a) a possible future reorganisation, or

b) a redefinition of the group for grouped based licensing.

Corus response

The licences would be held by the corporations as described in the application. As such there is no corporate reorganization contemplated beyond what is already described in the application.

From an operational standpoint, we will move the people and operations conducted at Brookfield Place to Corus Quay so these become part of the overall team and plant at our premises. The Brookfield space was operated by Astral Media Inc. and Teletoon occupied space pursuant to a verbal agreement as explained in our response to question 12.

From a regulatory perspective we set out our expectations in paragraphs 94 to 103 of the Supplementary Brief. Since we filed, the Teletoon licence renewal process has been delayed. In any case our expectation would be to treat the licences in the same manner that we described in March. 7

6. Appendix 2A - We understand some of the ownership information usually contained in Appendix 2A has been deposited through the BOIAF for the past ownership structure of Corus, Bell and Astral Media Inc.

- Nonetheless, the information is still needed for the new corporation that has been created by Corus, namely 4441 Inc.

- Further, the Commission has not received the composition of the board of directors for 4441 Inc. following the transaction.

a) Therefore, please file an Appendix 2A presenting the final control chain of 4441 following this transaction should the Commission approve it.

Corus response

Please find as Appendix A the revised Appendix 2A, filed with this response.

7. Termination fees – Concurrently with the TELETOON application, the Commission received two other groups of applications for a change in control, i.e. change in control of the undertakings CKQB-FM and CJOT-FM (Radio applications) and change in control of the undertakings Historia and Séries+ (H&S applications).

In the Radio applications, it is stated that Corus will pay $195,000 to BCE Inc. (BCE) if the Commission does not approve the BCE/Astral transaction, whereas the TELETOON application and the H&S applications state that BCE will pay $3,735M and $2,079M respectively to Corus if the Commission does require the divestiture of assets.

a) Please explain the rationale behind BCE paying Corus a termination fee in one instance and Corus paying BCE a termination fee in the other.

Corus response

There is a typographical error in Section 6.3 of the CJOT/CKQB share purchase agreement. It should read, “If this Agreement is terminated pursuant to Section 6.1(1)(d) then Vendor shall pay to Purchaser within three Business Days of such termination a cash amount of $195,000 (the “Termination Fee”) by way of liquidated damages” [emphasis added]. The second sentence of s. 6.3 reinforces the fact that there is a typographical error in the first sentence, by virtue of precluding “other amounts… due and payable…by Vendor” [emphasis added]; that is, the second sentence implies that the termination fee in the first sentence is payable by Vendor.

8. City of operation – The published address for TELETOON Canada is currently Brookfield Place, 181 , Toronto, ON M5J 2T3. In paragraph 107 of the supplementary brief, it is stated that Corus will be developing a Montreal-based 8

team to operate the French-language services. On the other hand, section 3.3 of the application form indicates that the intention is to move the balance of the operations of TELETOON Canada to Corus Quay in Toronto.

a) Please clarify and: • indicate where and how the English-languages services will be operated; and • detail the process of the transfer of one out of 4 undertakings to a different city.

Corus response

The English language services will be operated at, and the licences for all, will be held at Corus Quay, 25 Dockside Drive, Toronto, ON M5A 0B5.

The services that serve French-language audiences will be managed by a Quebec- based team resident in Montreal. We are currently looking for space but we can confirm that it will be located in that city.

This team will be responsible for programming, promotion and marketing, advertising and affiliate sales, and other “customer-facing” operations as they arise. It is in this manner that we can ensure that our programming reflects the needs of our core audience and customers.

9. Intangible benefits – In paragraph 104 of the supplementary brief it states that one of the intangible benefits of the current transaction is the creation of synergies and efficiencies, whereas paragraph 184 mentions that most of the programs produced by Corus are not suitable for the mainly adult audiences of the TELETOON Canada channels and that the Corus production system is not geared to this level of programming volume. In such a context, please explain how synergies can be created.

Corus response

The reference in paragraph 109 was to assure the Commission and the independent programming community that our demand for and needs for independently-produced programming will not change.

The synergies we contemplate relate to matters such as space costs.

Value of the transaction 10. Cash distribution – Please refer to subsection 9.12 of the SPA, it provides for dividends in an amount equal to substantially all of the cash on hand to be paid immediately before the calculation of the value of the working capital at closing. Our understanding is that the purchase price has been determined as if the amount of cash at hand as of the date of the transaction was close to $0. Please confirm or clarify. 9

Corus response

We confirm that, immediately before closing, cash is distributed, so there is no cash in the business at the time of closing, and therefore the working capital calculation is based solely on non-cash working capital. Please note that the working capital adjustment is based on 50% of the variance between the “Final Closing Working Capital” and the “Target Working Capital”, if the variance is greater than $1,950,000.

11. Financial statements – Please file a complete set of financial statements as of 31 August 2012 for TELETOON Canada, including the notes to financial statements. If available, also provide its interim financial statements prepared as of the date of the transaction, i.e., 4 March 2013, or as close to that date as possible.

Corus response

As requested, please find enclosed as Appendix B financial statements as of August 31st, 2012 (previously filed with our application) and interim financial statements as of February 28th, 2013. Please note that audited financial statements including notes are not available.

12. Leases – Please refer to Paragraph 12 of the Supplementary Information dated 17 April 2013. This paragraph states that no leases are to be assumed with this transaction.

a) Please clarify how assets currently under lease by TELETOON Canada will be replaced at date of closure of the transaction.

Corus response

Please see response to question 12 b) below.

b) Please provide details for any and all lease arrangements that TELETOON Canada as of 4 March 2013, and the planned disposition for each. The following table is provided to assist you in preparing this information. Example of leases include but are not limited to premises, transmission towers or tower space, software licences, vehicles, equipment, etc.

Corus response

There are no formal real estate lease arrangements for TELETOON Canada as of March 4th, 2013. Currently, TELETOON Canada occupies space in three different locations: Brookfield Place (Toronto), Corus Quay (Toronto) and at 1800 McGill College “Suite 1600” (Montreal).

The arrangement for space between Corus and TELETOON Canada at Corus Quay and TELETOON Canada and Astral Media Inc. for Brookfield Place and McGill College are simply verbal arrangements, which give TELETOON 10

Canada space at a set monthly price in the three locations identified above. The arrangements exist on a month-to-month basis and will terminate upon closing of the proposed transaction with Corus following the termination of a transition period, which effectively would occur within 30 days of the closing date.

There currently exits a licence for Broadview software used for programming and trafficking that expires at the end of 2013 and this licence will not be renewed. Other than this software licence, which will expire by year end, there are no other lease arrangements that will be assumed by Corus in this transaction.

Appendix C attached is a table that provides the particulars of these verbal arrangements.

Corus appreciates the opportunity to address these questions. We remain available to respond to any further information requests if required.

Sincerely,

Sylvie Courtemanche Vice President, Government Relations Corus Entertainment Inc.

Attachment

Cc: Marie-Claire Bouthillier, CRTC Kevin Goldstein, Bell Media Inc.

***End of document*** Appendix

1) 2)

3) 4) - 7 -

5) APPENDIX A ABRIDGED

APPENDIX 2A Section A Name of the APPLICANT 8324441 CANADA INC.

Definitions

2.1 Authorized Securities

Describe all categories of shares authorized to be issued.

Security Type Number of Votes Per Convertible Participating (6) Number of Shares Number Issued Share (y/n) (y/n) Authorized and Outstanding Common 1 n y unlimited one Shares

2.2 Shareholding

Supply the details for each shareholder holding 10% or more of the voting shares(5), of the voting rights (if different from the voting shares), and of any other category of shares identified in the common shares(6) definition. For the remaining shareholders, (those holding less than 10%) supply the total shares under "Others Canadian" and "Others Non-Canadian".

Security Type Shareholder Name Complete Home Address or Legal Entity Canadian(2) Number of % (1) Jurisdiction (x) Shares Held Votes Corus Common Shares Entertainment Federal Corporation X 1 100 Inc.

2.3 Directors and Officers

Supply a list of the current/proposed directors and officers of the corporation (3) (4)

Name of Complete Home Address Canadian(2) Directors Date of Appointment Officer Position Directors/Officers (1) (x) Calgary, Heather A. Shaw X March 1, 2013 Chair North York, Ontario John M. Cassaday X March 1, 2013 CEO Toronto, Ontario CFO & Thomas C. Peddie X March 1, 2013 Treasurer Etobicoke, Ontario Doug Murphy President Oakville, Ontario Vice-President Judy Adam Finance APPENDIX A ABRIDGED

Toronto, Ontario Corporate Gary Maavara Secretary Assistant Toronto, Ontario Randy Witten Corporate Secretary

Exemption:

The applicant hereby confirms that :

 All ownership information for each of the entities that form part of the control chain has been supplied within the last 12 months from the date of this application, and accepted as satisfactory by the Commission; and

 No changes have occurred since the last filing that would be subject to a notification requirement or prior approval by the Commission pursuant to the Regulations; and

 No amalgamation has occurred.

date of filing of last complete update: 13/03/11

BOIAF Rapids # 562859

YY/MM/DD

APPENDIX 2A Section B Name of the Shareholder Corporation

Definitions

2.1 Authorized Securities

Describe all categories of shares authorized to be issued.

Security Type Number of Votes Per Convertible Participating (6) Number of Shares Number Issued Share (y/n) (y/n) Authorized and Outstanding APPENDIX A ABRIDGED

2.2 Shareholding

Supply the details for each shareholder holding 10% or more of the voting shares(5), of the voting rights (if different from the voting shares), and of any other category of shares identified in the common shares(6) definition. For the remaining shareholders (those holding less than 10%), supply the total shares under "Others Canadian" and "Others Non-Canadian".

Security Type Shareholder Name (1) Complete Home Address or Legal Entity Canadian(2) Number of % Jurisdiction (x) Shares Votes Held

2.3 Directors and Officers

Supply a list of the present/proposed directors and officers of the corporation (3) (4)

Name of Complete Home Address Canadian(2) Directors Date of Officer Position Directors/Officers (1) (x) Appointment

For an additional APPENDIX 2A, copy tables 2.1, 2.2 and 2.3 on a new page

DEFINITIONS

(1) director/shareholder: If any of these persons hold public office, by election or appointment, indicate the office held under the name of the person(s).

(2) Canadian: Specify if Canadian or Non-Canadian. If a person, CANADIAN means a Canadian citizen, ordinarily resident in Canada, and as defined in the Direction to the CRTC (Ineligibility of Non-Canadians) P.C. 1997-486 as amended by P.C. 1998-1268. If a corporation, CANADIAN means a "qualified corporation" as defined in the Direction to the CRTC (Ineligibility APPENDIX A ABRIDGED

of Non-Canadians) P.C. 1997-486 as amended by P.C. 1998-1268.

(3) directors Means a person who is a member of the board of directors of a corporation or, where the corporation has no directors, a person performing functions that are similar to the functions performed by directors, as defined in the Direction to the CRTC (Ineligibility of Non-Canadians) P.C. 1997-486 as amended by P.C. 1998-1268.

(4) officers: Those persons designated as Chairman, President, Chief Executive Officer, Vice-President, General Manager, Secretary, Assistant-Secretary, Comptroller, Treasurer, Assistant-Treasurer or any others under similar titles.

(5) voting shares: The shares to which are attached one or more votes, and includes securities that are convertible into such shares at all times at the option of the holder.

(6) common shares: The shares that represent the residual equity in the earnings of the corporation, and includes securities that are convertible into such shares at all times at the option of the holder and the preferred shares to which are attached rights to participate in the earnings of the corporation with no upper limit.

(7) applicant/shareholder: If a person, refers to a person who has reached the age of majority. APPENDIX B ABRIDGED APPENDIX B ABRIDGED APPENDIX B ABRIDGED APPENDIX B ABRIDGED APPENDIX B ABRIDGED APPENDIX B ABRIDGED APPENDIX C ABRIDGED

Via GCKey

July 26th, 2013

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2

Dear Mr. Traversy:

Re: TELETOON Canada Inc. – Various Undertakings – Transfer of Shares and Acquisition of Assets - Change in Effective Control – Application No: 2013-0596-2 – Response to Deficiency Letter Dated July 12th, 2013

Corus Entertainment Inc. (Corus), on behalf of TELETOON Canada Inc. (TELETOON) hereby provides its response to the Commission’s deficiency letter dated July 12th, 2013.

Corus has filed via GCKey the following documents:

1. Response to deficiency letter dated July 26th, 2013; 2. Appendix A – Revised TELETOON Canada Balance Sheet as at 28-02-13 – Confidential and Abridged version.

Pursuant to sections 31 and 32 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the “Rules”), Corus is designating the financial information in Appendix A as confidential.

The sections that have been redacted contain competitively sensitive information whether for the current year or future years that could be detrimental to the licensees involved if released. This information is not otherwise publicly accessible, whether to the Commission or for securities purposes and could if released impact our ability to negotiate similar commercial arrangements. An abridged version has been provided for the public record.

Corus would be pleased to respond to any questions and would ask that they be directed to the undersigned.

Thank you for your attention to this matter.

Sincerely,

Sylvie Courtemanche Vice President, Government Relations Corus Entertainment Inc.

Attachments

Cc: Marie-Claire Bouthillier, CRTC Kevin Goldstein, Bell Media Inc. Pierre Boivin, Trustee

***End of document***

Via GCKey

July 26th, 2013

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2

Dear Mr. Traversy:

Re: TELETOON Canada Inc. – Various Undertakings – Transfer of Shares and Acquisition of Assets - Change in Effective Control – Application No: 2013-0596-2 – Response to Deficiency Letter Dated July 12th, 2013

Corus Entertainment Inc. (Corus), on behalf of TELETOON Canada Inc. (TELETOON) hereby provides its response to the Commission’s defiiciency letter dated July 12th, 2013.

The Commission’s questions are reproduced below with the Applicant’s response provided in bold.

Value of the transaction

1. Leases – Please refer to question 12 of your ressponse letter dated 12 June 2013. You state that the licence for Broadview software will end on 31 December 2013. Further, you indicate in the table accompanying your letter that you do not intend to renew this lease. Please explain how you will replace this software.

Corus response

The purchaser will integrate TELETOON into the purchaser’s existing Pilat programming software (IBMS) and WideeOrbit traffic software licence agreements. This transfer is essential as the Astral Media Inc. infrastructure is absorbed into the Bell Media Inc. systems. As the Commission is aware, the absorption of Astral Media Inc. commenced almost immediately after the closing date of the Bell-Astral transaction on July 5th, 2013. Wee expect to complete the integration to Corus systems shortly after the closing once Commission approval is secured. 2

2. Financial Statements - Please refer to the financial statement ‘TELETOON Canada Inc., Balance Sheet as at 28-02-13’ found in Appendix B – Financial Statements submitted with your last response.

a) While the title indicates the financial statement is reporting information as at 28 February 2013, the columnar headings indicate that the information provided is as at 28 February 2012 and 31 August 2012 respectively. Please clearly identify the reporting date for the information provided.

Corus response

The first columnar heading should have read “Feb 28, 2013”. A revised balance sheet is enclosed as Appendix A.

b) This financial statement does not report any long term debt held by TELETOON Canada Inc. other than Program exhibition rights payable. Please confirm that no long term debt is being assumed by the purchaser related to this transaction.

Corus response

We confirm that there is no long-term debt being assumed by the purchaser related to the transaction.

1. Programming - In paragraph 87 of the supplementary brief, Corus states that “while there is some overlap of audiences targeted by YTV and TELETOON, it is important to note that TELETOON is not a kids channel but rather an animation service targeting audiences of all ages during the different day parts. The TELETOON Retro and Cartoon networks also have a distinctive programming mandate.” Staff notes that, as set out by condition of licence in Appendix 5 to Broadcasting Decision 2011-446, no more than 10% of the programs broadcast by Treehouse may be broadcast by the specialty service YTV.

a) Please elaborate on the possible overlap between Treehouse TV and TELETOON, TELETOON Retro and Cartoon Network.

Corus response

Corus has been involved with TELETOON for over a decade and the overlap between the services has been minimal. So the measures are in place and this will not change. Our programming strategy is driven by the imperative to provide our subscribers and audiences with a varied, diverse and interesting range of program content as well as to meet the requirements of existing conditions of licence.

TELETOON, TELETOON Retro and Cartoon Network are mainly targeted at people older than adolescents. Treehouse is a pre-school channel that also has co- viewing by parents but its programming is primarily young children content.

3

The Commission has already established a framework of conditions through the licensing process to maintain diversity between the services. This is clear on a plain reading of the content-related terms of each licence.

TELETOON Retro is by nature of service a channel that uses content that is at least 10 years old and with 90% of all programming (with the exception of categories 12 and 15) being animated content. So it is already restricted. It also already has conditions of licence restricting the access to non-animated programming.

TELETOON Retro Nature of Service is as follows:

a) The licensee shall provide a national Category 2 specialty television service with English- and French-language feeds. The service shall present classic cartoons from Canada and around the world, including animated movies, specials, series and shorts which commenced production at least ten (10) years prior to their exhibition by the licensee.

b) The programming must be drawn exclusively from the following categories, as set out in Schedule I to the Specialty Services Regulations, 1990: 1, 2a, 2b,3, 4, 5a, 5b, 6a, 6b, 7a, 7b, 7c, 7d, 7e, 7f, 7g, 8a, 8b, 8c, 9, 10, 11, 12, 13, 14 and 15.

c) With the exception of material drawn from categories 12 and 15, no less than 90% of all programming broadcast during the broadcast week shall be animated programs drawn from categories 7d, 7e and 7g.

d) No more than 10% of all programming broadcast during the broadcast week shall be non-animated programs drawn from categories other than 7d, 7e, 7g, 12 or 15.

The Cartoon Network Nature of Service is as follows:

a) The licensee shall provide a national, English-language specialty Category B service devoted to programming from international markets, featuring the latest trends in non-violent action, adventure, superheroes, comedy and interactivity. The service’s interactivity will be achieved via programs on games associated with action series as well as magazine shows that cover current comic book trends and classics in comic books.

b) The programming shall be drawn exclusively from the following program categories set out in Item 6 of Schedule I to the Specialty Services Regulations, 1990, as amended from time to time: 5(b) Informal education/Recreation and leisure 6(b) Amateur sports 7 Drama and comedy (a) Ongoing dramatic series (b) Ongoing comedy series () 4

(c) Specials, mini-series or made-for-TV feature films (d) Theatrical feature films aired on TV (e) Animated television programs and films (f) Programs of comedy sketches, improvisation, unscripted works, stand-up comedy (g) Other drama 10 Game shows 11 (a) General entertainment and human interest (b) Reality television 12 Interstitials 13 Public service announcements

c) No more than 15% of all programming broadcast during the broadcast week shall be drawn from program category 7(d).

The Treehouse Nature of Service is as follows:

a) The licensee shall provide a national English-language specialty Category A service.

b) All programs broadcast between 6 a.m. and 9 p.m. shall have as their target audience children up to six years of age.

c) The licensee may draw programming from all the categories set out in item 6 of Schedule I to the Specialty Services Regulations, 1990, as amended from time to time.

d) The licensee shall not devote more than 10% of the broadcast month to programs drawn from each of categories 2(b) Long-form documentary and 6(a) Professional sports.

e) A minimum of 80% of the programs broadcast between 9 p.m. and 6 a.m. that are drawn from category 7 Drama and comedy and that have parents, families and caregivers as their target audience shall be copyrighted at least 10 years prior to the broadcast year in which they are broadcast by the licensee.

f) No more than 10% of the programs broadcast between 9 p.m. and 6 a.m. shall be drawn from category 8 (Music) programming that targets an audience other than preschoolers.

g) In each broadcast year, the licensee shall devote no less than 70% of the broadcast day and no less than 60% of the evening broadcast period to the exhibition of Canadian programs.

b) Please elaborate on the measures you will put in place to ensure that there is no or limited programming overlap between the TELETOON services, Cartoon Network, YTV and Treehouse, and to ensure that those services remain distinct at all times. 5

Corus response

The first measure is compliance with the various natures of service and conditions of licence as set out in the response above. Each set of conditions of licence are clearly distinctive.

Another constraint on these specialty services is the program licence agreements which tell us on which of the services a program title can be used.

A third constraint are our customers in the form of subscribers and the BDUs who watch carefully what we program to ensure that they are getting value from each of their subscriptions. This is the new reality of the à la carte world.

b) Would you accept a condition of licence similar to Treehouse’s for TELETOON, TELETOON Retro and Cartoon Network?

Corus response

As noted above, these services already have a wide and deep range of conditions of licence that constrain what they can schedule.

In addition, Treehouse and TELETOON are which are the types of services where the investments are made for first window broadcast content. Category B specialty services by their very nature typically serve as a second, third or more window for broadcast content. So it is highly unlikely given this that there would be any kind of significant overlap between the Category A and Category B services.

More importantly, as the broadcast system evolves it is increasingly the market that is determining success. As a result, we would oppose another condition that would serve to inhibit our ability to meet the needs of customers especially given the fact that all of these services currently exist is there is minimal programming overlap at this time. We would also need to see the exact language of a condition of licence before making a comment about it.

2. Benefits to the system - At paragraphs 98 to 100 of the supplementary brief, Corus announces its intention to operate TÉLÉTOON Rétro French independently from its group. Corus adds that it intends to become a significant contributor to the development of the French-language Quebec broadcasting environment. Please elaborate on the reasons for Corus’ proposal, especially given that in application 2013-0597-0, it requests authority to acquire two more French-language specialty services, Historia and Séries+. More specifically, how would this strategy provide benefits to the Canadian broadcasting system, to the production of Canadian content and to Canadian audiences?

Corus response

Before addressing why Corus believes that operating TÉLÉTOON Rétro French independently from its English-language group of services will benefit the Canadian broadcasting system, the production of Canadian content and will also 6 be beneficial to Canadian audiences, it is important to first understand that our proposal is built upon the Commission’s existing policy on Group-based Licensing (Broadcasting Regulatory Policy CRTC 2010-167 “BRP 2010-167” – A group-based approach to the licensing of private television services). It also takes into consideration the manner in which the Commission applied the Group-based Licensing Policy for Astral Media Inc.’s group of television services in 2012 (Broadcasting Decision CRTC 2012-241 “Decision 2012-241”).

In BRP 2010-167 the Commission stated the following:

41. The Commission must supervise and regulate the broadcasting system in order to fulfill the policy objectives of the Act. These include encouraging the development of Canadian expression; being readily adaptable to scientific and technological change; and ensuring that each element of the Canadian broadcasting system contributes in an appropriate manner to the creation and presentation of Canadian programming.

42. The Commission considers that these objectives, particularly the adaptability of the broadcasting system to change, are best met through a regulatory approach that recognizes the significant challenges to conventional and the stronger role that both regulated and unregulated, on-demand platforms are playing in providing Canadians with the television programming they need and want.

43. The Commission notes that there has been a significant shift in Canadians' viewing habits since the publication of the 1999 Television Policy. The subsequent widespread introduction of has rapidly brought Canadians a wide variety of programming choices, from both Canadian and non-Canadian sources. The availability of new services on conventional and specialty television platforms has been significantly augmented by content available from alternative, unregulated platforms.

44. The exclusivity of broadcasters' programming has eroded as a result of increased choice and increasing cost of foreign programming. This has resulted in a diminishing of the profits realized from the exhibition of popular foreign programming. The profitability of this programming has, in the past, provided conventional television broadcasters with the resources to spend on less profitable Canadian programming, such as programs of local reflection, local news, and especially high-quality scripted Canadian entertainment.

Accordingly, the Commission’s Group-based Licensing Policy was formulated with a full view of achieving the objectives of the Broadcasting Act while recognizing the market and technological changes that are impacting the Canadian television industry.

The Commission established which media groups would be subject to Group- based licensing as follows:

7

115. … It is the Commission's determination that a group-based approach, at least initially, will be applied to private, English-language ownership groups that generate more than $100 million in annual revenues from conventional television stations, and own at least one specialty or pay programming service (designated groups). Accordingly, as noted above, the groups meeting the criteria at this time are CTVgm, and Rogers.

118. In principle, the Commission considers that a modified group-based approach with the associated flexibility could apply to ownership groups other than designated groups. The Commission will consider applications for licence amendments from other ownership groups, including those controlling multiple specialty and pay services, to allow flexibility in the allocation of their services' CPE obligations.

In 2010, Corus requested that its English-language specialty, pay and over-the-air television services be considered at the Group-based licensing hearing held in the spring of 2011. Corus’ group of English-language television services included over-the-air, specialty and pay services and collectively generated more than a $100 million in annual revenues. The Commission agreed to do so and Corus’ television services are now licensed on a group basis (Broadcasting Decision CRTC 2011-446).

Accordingly, given that TÉLÉTOON Rétro French and Historia and Séries+ combined would not generate more than $100 million in annual revenues and that they are French-language services we considered that the Commission’s Group-based Licensing Policy would not apply to this group of services.

More importantly however, we considered carefully the Commission’s determinations in Decision 2012-241. In that decision the Commission decided that Astral Media’s English- and French-language specialty and pay services would be regulated as one group of services in the following manner:

13. After examining the applications, the interventions and Astral’s replies, the Commission considers it appropriate to designate Astral as a group in recognition of its unique operating reality, namely the fact that that its services must meet comparable requirements in both linguistic markets in Canada and that the revenues it derives from the two markets are almost equal. To ensure that this flexibility does not unduly disrupt the existing balance between the two linguistic markets, the Commission will monitor the allocation of CPE between the French- and English-language services over the licence term and will assess the extent of these allocations at Astral’s next licence renewal [emphasis added].

At the hearing, the English-language and French-language production associations and other intervenors had advocated that the application of the group-based licensing approach should be done separately for the English- language services and the French-language services. The concern was that each linguistic market would not continue to see the same level of production and expenditures on Canadian programming and that one or the other linguistic 8 market would be short-changed as a result of having English- and French- language services within one licensing group. The Commission was sensitive to this concern and that is why it noted that it would continue to monitor the allocation of CPE between English- and French-language services over the licence term even though it accepted the Astral proposal.

Corus believes that its proposal best serves the Canadian broadcasting system as well as the production of Canadian content and will also be beneficial to Canadian audiences for the following reasons:

• It would avoid any undue disruption to the existing balance between the two linguistic markets and would ensure a continued level of spending and separate window of opportunity for acquisitions for both the English- and French-language markets, thereby providing stability in the creation of Canadian content and benefiting the production community and the audiences in the separate markets ;

• Corus’ proposal ensures that for these French-language services all programming, marketing, communication, advertising sales and matters relating to pricing, packaging and cross platform content initiatives with broadcasting distribution undertakings would be managed by the Quebec office, thereby providing the best possible and most relevant content opportunities for French-language audiences;

• It would allow Corus to focus and create a separate French-language programming group in Montreal thereby better enabling us to contribute to the Quebec broadcasting environment and allowing for a direct viewer and customer interface through our Quebec-based francophone broadcast employees;

• Quebec-based producers would have an opportunity to pitch programming ideas in Montreal;

• The proposal is fully compliant with the Commission’s existing policy on group-based licensing; and

• There is no unique operating reality that would apply in the Corus context since the revenues for the combined English-language services would greatly surpass those of the combined French-language services, therefore there is no sound policy justification for deviating from the Commission’s determination in Decision 2012-241.

3. Canadian programming - At paragraph 117 of the supplementary brief, Corus specifies that it will allocate $16,615,000 of incremental funds to the production of high quality Canadian programming. Corus further states that those funds will stimulate the production of new, innovative and relevant Canadian program offerings for broadcast on the TELETOON networks.

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a) Please demonstrate how the proposal is incremental to Corus’ current and planned expenditures in respect of the production of Canadian content.

Corus response

These funds will be incremental to the CPE that is due in each broadcast year. The total on screen spending will be $21,165,000 with $16,615,000 dedicated to production. The table at paragraph 162 breaks this out by category and by year.

b) Please specify the proportion of this amount that would go to third parties.

Corus response

As we stated in the application supplementary brief at paragraph 113, a minimum of 75% would be spent with independent producers.

c) Please specify the proportion of this amount that would go to French-language and English-language projects.

Corus response

As we stated in the supplementary brief at paragraph 113, a minimum of 90% will be directed towards animation programming. This type of programming lends itself well to multiple languages. The Corus studio Nelvana produces in English and Quebec French as well as a range from 16 to 44 other languages depending on demand.

In this context it will be up to the independent producers to determine in what languages they will produce. This will no doubt be driven by the markets they uncover for their programs.

d) Please justify how this proposal will benefit the Canadian broadcasting system in general and not exclusively TELETOON Canada.

Corus response

TELETOON Canada already spends a great deal on programming and this would be incremental to that amount. As a result, most of the content produced with these benefits funds will likely find a first broadcast home on other services that need animation programming. As such, other Canadian services will effectively have more seed money to build their schedules.

This demand from other Canadian services will also impact the amount of programming that is done in English or French as a first window. This also means that the smaller French-language market producer will have more seed money to create new programming.

e) Confirm that no more than 10% of this amount will be allocated to on-line services or productions. 10

Corus response

Yes, we confirm that not more than 10% of this amount will be allocated to on-line services or productions.

4. Tangible benefit initiatives As part of the proposed on-screen tangible benefit initiatives, the Corus Export Initiative will assist Canadian independent producers to gain access to international markets. As set out in Public Notice 1993-98, the Commission accepts as tangible benefits initiatives programming expenditures for radio, television and cable as long as the programming is new or enhances that offered by the existing licensee. Examples of such initiatives include:

• the production and development of new programming for television, particularly in "under-represented" categories; and productions involving the independent production sector; • co-operative television productions; • new or improved news and public affairs radio and television programming; • the production of specific, new, locally-produced radio and television programs; • the development of pilots for television; • the production of community programming, where the expenditure is clearly identifiable as incremental to the 5% spending benchmark for cable as set out in Public Notice CRTC 1991-59, entitled "Community Channel Policy"; and • contributions to program development funds and program production funds for television.

a) As such, please justify why the Corus Export Initiative meets the Commission’s eligibility criteria for an on-screen tangible benefit initiative.

Corus response

It is well known that the Canadian market alone is not large enough to support a significant independent production sector. The market is also changing as noted by the Commission’s Chairman in his speech to the Association des producteurs de films et de television du Québec in May:

To succeed in the digital environment, the production and creative industries must move beyond individual projects. We have to produce content for the global audience and create international brands to rival the best in the world.

The combination of Canadian licence fees, tax credits, and funding pools are just enough to finance production but producers still require capital investments to develop new content, survive failures and to market their works in international markets. This incremental investment is only forthcoming if producers can demonstrate tangible progress in international programming markets.

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In Canada we talk about the “$600 cup of coffee” required by producers in smaller centres to pitch projects in Toronto or Montreal. On a global scale this “cup of coffee” amount gets much higher.

The matter of marketing and promoting Canadian works was discussed extensively at the Commission’s Telefilm symposium last October on the day before the International Institute of Communications (IIC) conference which was co-chaired by the Commission’s Chairman. The timing of the symposium with the IIC was by design. Fostering the export market was one key topic of the discussion, as noted by the Chairman of the Commission:

This symposium is a starting point. I’m confident that it will lead to a joint strategy that will allow us to promote Canadian content more effectively at home and invigorate our brand in the global marketplace. As you go through the day’s sessions, I would encourage you to be unconventional in your thinking, bold in your ideas and courageous in your vision.

In our discussions with officials from agencies such as Telefilm and the Canadian Media Fund as well as with production companies across Canada, the notion of funding for export development was met with enthusiasm. Our plan would be to have existing agencies administer the funds and oversee how the producers would use it. None of the funding would be accessed by Corus.

Providing independent producers with the capital to develop international markets is as important as script development and training programs. It is a key piece of the structure needed to build the Canadian production system. As a result, the success of the Canadian programming system rests with our ability to sell content not just domestically but internationally. Measures such as this fund will ensure that on-screen Canadian content continues to get produced not only for Canadian audiences but also for a global audience.

− At paragraphs 121 and 122 of the supplementary brief, Corus indicates that the Script and Concept Development initiative and the Export Initiative will be administered by knowledgeable third parties.

b) Please demonstrate how this project would not normally be undertaken or realized in the absence of the transaction.

Corus response

In the normal course any export initiative undertaken by Corus would be done solely for our benefit. The Script and Concept Development and the Export Initiative will be incremental to what we do and it won’t be for our benefit. It is the independent producers that will use this money. In the normal course we would not fund their efforts in these areas.

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c) Please elaborate on the structure and operations of these funds, including participation on the board of directors, participation on the selection committee, selection criteria and measurement of the success of the funds’ initiatives.

Corus response

The funds would be administered by groups such as Telefilm Canada, Canada Media Fund or the National Screen Institute. We have discussed this generally with them but have not come to definitive agreements. However the terms for these agreements will state that they will administer the funds without direct Corus involvement. They may ask us for advice from time to time due to our position as a leading producer and broadcaster.

The Corus mission of the Export Initiative is encapsulated in Telefilm Canada’s description of their program:

The Canada Feature Film Fund’s International Marketing and Festival Participation Program is available to Canadian companies specializing in film production, distribution and sales, and aims to support the marketing and promotion of Canadian content and talent abroad. This Program was previously known as the International Festival Participation Program.

The Program’s objectives are in line with Telefilm Canada’s strategic priorities of promoting talent and increasing access to Canadian content. It supports the international marketing and promotional strategies of Canadian productions officially selected at recognized international festivals.

Of course this relates to film production so we would also apportion funds to television programming. This would be administered by a body such as the Canada Media Fund or the National Screen Institute.

The manner in which they decide to allocate funds and measure success will no doubt be done in the manner that they do it now with the requisite governance and transparency structures applied as they do to existing funding mechanisms which they operate. Corus has no operating involvement in these organizations and no board seats.

− Staff notes that Corus proposes to allocate tangible benefits to industry festivals. Please demonstrate how the proposed allocation to industry festivals is incremental to Corus’ current practices of sponsoring such festivals and would not normally be undertaken or realized in the absence of the transaction. Staff notes, for instance, that Corus is already a lead sponsor for Digifest.

Corus response

Corus provided the fledgling Digifest festival with space for the event at Corus Quay. This was a substantial cost saving for them, which in fact made the festival possible. 13

The benefits will be cash payments to the festivals. In the ordinary course we would not fund these festivals with cash. Our normal contribution would simply be in the form of purchasing tickets to the events or advertising and other promotion for the event.

− Staff notes that various initiatives related to industry training are set out at paragraphs 132 to 147 of the supplementary brief. As set out in Public Notice 1993-68, the Commission generally accepts as a tangible benefit, contributions to organizations involved in the production of Canadian programming or the promotion and development of Canadian talent. Scholarships in broadcasting or broadcast-related fields also constitute tangible benefits. Examples of grants that are acceptable as tangible benefits would include grants to local artistic organizations whose works are related to the broadcasting system, as well as contributions, over and above annual membership fees. In order to assess the eligibility of the proposed initiatives, please:

c) specify how the funds allocated to the various initiatives will be used, and

d) justify how this use is consistent with what the Commission generally accepts as tangible benefits.

Corus response

The schools will use the funds for scholarships as contemplated by the Commission’s benefits policy.

The Concerned Children’s Advertisers, the Canadian Communications Foundation, and the Corus Inner City Childhood Obesity Research Initiative will be used to create content.

The YMCA and City Life Project use the funds to pay for the basics of operating the program for inner city youth who would otherwise not have the access to the media tools and training.

The mission of the City Life Film Project is as follows:

To provide talented youth from priority neighbourhoods with the unique opportunity to tell stories from their communities and to achieve artistic excellence through filmmaking.

These programs are offered to the participants free of charge so in a sense our funding acts like a form of scholarship. By establishing these programs they also become a form of local artistic association that provides that community another cultural voice.

It is perhaps trite to say that our communications environment is changing and that no one really can predict how it will evolve. Festivals and these schools establish a process and a place where people can learn the skills that Canadians will need to thrive in the digital media economy. These are the places where 14 analysis of trends takes place and where innovation is fostered. The schools that are listed in the application are amongst the best on Earth. The funding of these is indeed a significant benefit that impacts the entire communications system.

− Staff notes that a number of initiatives proposed would be extensions of existing benefits and that payments to those initiatives would be deferred for a number of years until the existing benefits expire. More specifically, the following contributions were identified as benefits in Broadcasting Decision 2009-706:

• University of Waterloo at Stratford • YMCA • City Life Film Project • Concerned Children’s Advertisers

Generally, the Commission requires that tangible benefits be paid over seven consecutive broadcast years starting in the year of the transaction.

e) Please explain why the Commission should accept this alternative proposal.

Corus response

The table at paragraph 162 sets out the nature of all the payments. At the bottom of the table is a line entitled “Total” which is the total of the payments for each year. The Commission will recognize that the totals for each year are roughly equal. So our significant benefits proposal meets the policy that benefits are paid out over seven years.

The groups noted operate on existing commitments. Our payments will extend their revenue streams for the balance of the seven year period which is efficient and makes their fiscal planning more predictable. We are providing them with the funds when they need it. This will benefit other groups who will be receiving higher grants earlier in the term in order to establish equal cash flow overall. Our experience is that some groups like the cash up front which they use as a form of investment capital that they can draw from later.

5. Intangible benefits - As part of its benefits proposal, Corus identifies the following intangible benefits:

• Corus’ experience will strengthen the service’s Canadian programming offering; • Corus’ plans to improve TELETOON Canada’s digital interactive media presence; • Corus’ plans to establish a Montréal-based team.

Please elaborate on each intangible benefits initiative and demonstrate how this project would not normally be undertaking or realized in the absence of the transaction.

15

Corus response

Corus’ experience will strengthen the service’s Canadian programming offering

The Commission has set out its policy regarding intangible benefits in Public Notice CRTC 1993-68. The policy states that intangible benefits may be as significant as tangible benefits and, in some cases, of primary importance in the approval of transactions. In addition, only proposed initiatives that would not be realized without approval of the proposed transaction will be viewed as benefits. Expenditures that would normally be considered ongoing normal expenses of the current licensee do not qualify as benefits unless that licensee, because of financial circumstances, is unable to implement the initiative within the timeframe proposed by purchaser.

It is important to note that currently Corus already holds 50% of the voting shares of TELETOON through its wholly-owned subsidiaries (YTV Canada Inc. and Nelvana Limited). Accordingly, Corus is very well acquainted with this Canadian animation service. As one of Canada’s most significant producers of Canadian programming, which is exclusively in the animation genre and the many investments (over 1 billion dollars) we have made in the production of Canadian programming over the last decade, Corus is uniquely positioned through a 100% ownership and control of the TELETOON to strengthen the service’s Canadian programming offering.

Corus has already made significant investments in ensuring it has the best digital platform to secure the success of Canadian programming through its investments in its state of the art broadcast centre Corus Quay. Bringing TELETOON under the control of Corus will mean that the many investments made will now be used to the benefit of TELETOON and this will help facilitate the delivery of Canadian programming on all available platforms to the benefit of Canadian consumers.

Our incremental spending is detailed in our tangible benefits proposals. Nevertheless we believe that TELETOON will uniquely benefit from Corus’ experience, since we are a producer of Canadian programming making Canadian animation content available in more than 150 countries and in more than 40 languages.

We believe Corus’ bench strength will help reinforce the service’s Canadian programming because we fundamentally understand that Canadian programming cannot continue to succeed and grow through domestic distribution alone. It must also succeed on the international stage.

The Chairman of the Commission recently expressed his view on what lies ahead for Canadian creative industries.1 He stated that all of the new changes in the television environment offered extraordinary possibilities for the creative sector. With more than $3 billion of investments by Canadian broadcasters in 2012-2013

1 (Banff Film and TV Festival – 2013 http://www.crtc.gc.ca/eng/com200/2013/s130612.htm) 16

“the Canadian broadcasting system has access to the type of funding to create high-quality films, TV programs and other screen-based content for distribution on multiple platforms.” More importantly, “audiences are now globally connected and on the lookout for new and exciting content…Canadian-made productions also appeal to viewers in the US, Europe and hundreds of other countries.” The Chairman believes that:

It all adds up to outstanding opportunities to put Canada on the world map as a producer of quality content. The time has come to define ourselves in terms of who we are—in all our diversity—with self-confidence and audacity.

We agree. Canadian programming must succeed beyond the confines of our domestic market. Corus’ Canadian programming sales offices in strategic locations around the world and its strategic alliances with international broadcasters such as NBCUniversal (KidsCo), have enabled us to reach 15 million subscribers worldwide in 100 countries and in 17 languages. This type of bench strength, although not an incremental spend per se, represents what we believe is a unique opportunity for Canadian content to succeed on the world stage. Corus has the relationships and the wherewithal to promote and champion Canadian programming throughout the world. Corus will provide leadership, knowledge, expertise and support such as promoting Canadian content at MIP.

Ability, strength and capability both through our employees and infrastructure are what Canadian programming needs and we bring all of these elements to the TELETOON service. Therefore we believe that this represents a significant intangible benefit that will help strengthen the Canadian programming offered on TELETOON.

Corus’ plans to improve TELETOON Canada’s digital interactive media presence

Through our investments in Corus Quay, Corus is uniquely positioned to foster TELETOON’s digital interactive media presence. We operate a world-class digital broadcast facility that has all the elements necessary to grow and further TELETOON’s digital media presence.

But this digital media presence requires not only state of the art digital infrastructure, it also requires the support of a major media group such as Corus to facilitate a better and more robust digital media presence. We will facilitate this through our strong relationships with broadcast distributors.

In a new digital broadcast environment, leveraging content on the digital platform requires bench strength and Corus will bring this to TELETOON.

We see Corus bringing TELETOON the support and guidance it needs for a greater digital media interactive experience through the following means:

• Exploring development opportunities through growth of the 3D animation markets; 17

• By driving growth for content that features recognizable characters on multiple platforms; and

• Securing the delivery of TELETOON content on emerging platforms for content distribution such as video-on-demand, subscription video-on- demand, over-the-top services, smart services, tablets and video games.

This is not an exhaustive list but rather simply represents the many opportunities ahead to improve TELETOON’s digital interactive media presence.

Corus’ plans to establish a Montreal-based team

Currently, TÉLÉTOON does not have a Montreal-based team. Corus intends to establish such a team with the acquisition of TÉLÉTOON, Historia and Séries+.

The investments made will be significant and include securing office space and the necessary infrastructure needed to support this team. In addition, Corus will be hiring new executives and employees to support the following functions for the French-language services we are seeking to acquire:

• programming, marketing, communication, advertising sales and matters relating to pricing, packaging and cross platform content initiatives with broadcasting distribution undertakings;

• to contribute to the Quebec broadcasting environment and allow for a direct viewer and customer interface through our Quebec-based francophone broadcast employees; and

• an opportunity for Quebec-based producers to pitch programming ideas.

Corus has already announced that Mario Cecchini will be leading the Quebec- based team. Mr. Cecchini is a seasoned media executive with extensive experience in Quebec as well as in the Canadian broadcast sector in general.

Accordingly, the Canadian broadcasting system would now have a significant intangible benefit through the establishment of having a new Quebec-based, fully staffed office that would ensure the best possible and most relevant content opportunities for French-language producers and audiences. Corus Média will replace Astral as the third major player in the Quebec market.

Without the acquisitions proposed, it is clear that such an investment in the Quebec market would not be made.

Corus appreciates the opportunity to address these questions. We remain available to respond to any further information requests if required.

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Sincerely,

Sylvie Courtemanche Vice President, Government Relations Corus Entertainment Inc.

Attachment

Cc: Marie-Claire Bouthillier, CRTC Kevin Goldstein, Bell Media Inc. Pierre Boivin, Trustee

***End of document*** ABRIDGED Via GCKey

August 15th, 2013

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2

Dear Mr. Traversy:

Re: TELETOON Canada Inc. – Various Undertakings – Transfer of Shares and Acquisition of Assets - Change in Effective Control – Application No: 2013-0596-2 – Response to Deficiency Letter Dated August 8th, 2013

Corus Entertainment Inc. (Corus), on behalf of TELETOON Canada Inc. (TELETOON) hereby provides its response to the Commission’s deficiency letter dated August 8th, 2013.

Corus has filed via GCKey the following documents:

1. Response to deficiency letter dated August 8th, 2013; 2. Appendix A – Draft Articles of Amalgamation – Confidential and Abridged versions; 3. Appendix B – Appendix 2A – Confidential and Abridged versions; 4. Appendix C – Cross-Media Ownership; 5. Appendix 1 – TELETOON Historical CPE; 6. Appendix 2 – TELETOON Retro English Historical CPE; 7. Appendix 3 – Corus Group CPE and PNI; 8. Appendix 4 – TELETOON and TELETOON Retro English PNI.

Pursuant to sections 31 and 32 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the “Rules”), Corus is designating the home addresses of the individual directors and officers of the corporations listed in Appendix A and B as confidential. This request is made to address privacy concerns related to the disclosure of the home addresses, other than the city of residence, of these directors and officers. Abridged versions of all appendices have been provided for the public record. Corus would be pleased to respond to any questions and would ask that they be directed to the undersigned.

Thank you for your attention to this matter.

Sincerely,

Sylvie Courtemanche Vice President, Government Relations Corus Entertainment Inc.

Attachments

Cc: Marie-Claire Bouthillier, CRTC Kevin Goldstein, Bell Media Inc. Pierre Boivin, Trustee

***End of document*** Via GCKey

August 15th, 2013

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2

Dear Mr. Traversy:

Re: TELETOON Canada Inc. – Various Undertakings – Transfer of Shares and Acquisition of Assets – Change in Effective Control – Application No: 2013-0596-2 – Response to Deficiency Letter Dated August 8th, 2013

Corus Entertainment Inc. (Corus), on behalf of TELETOON Canada Inc. (TELETOON) hereby provides its response to the Commission’s deficiency letter dated August 8th, 2013.

The Commission’s questions are reproduced below with the Applicant’s response provided in bold.

Ownership Analysis 1. Involvement of the trustee – In Broadcasting Decision CRTC 2013-310 (Decision 2013-310), the Commission required as a condition of approval the divestiture of certain assets to be put in trust.

a) In view of this, please clarify the role of the trustee in the current transaction (i.e. involvement in transaction and in contracts/agreements).

Corus response

The position of the Trustee is defined by the Voting Trust Agreement (VTA) between BCE Inc. (Bell) and Pierre Boivin (the Trustee) which was approved by the Commission in a letter dated June 27, 2013. The VTA sets out the context in the recitals and the obligations of the Trustee to Bell.

In the case of TELETOON Canada Inc. assets that are the subject of this application, the Trustee holds exactly half (50%) of the ownership shares of the 2 company on behalf of Bell. The Trustee does not control and does not manage the assets. Corus holds the other half of the equity. Control is exercised by the Board of Directors and a separate management team operates the company.

This management team and Corus have conferred with the Trustee about the status of these operations. The Trustee has appointed directors to the TELETOON board and has participated in a Board of Directors meeting as an observer. The company is operating on a stand-alone basis in the normal course.

b) In the event that the Trustee’s approval is required in order to proceed with the current transaction, please file an executed copy of the document signed by the Trustee giving the right to Bell to act on its behalf and giving its approval to proceed with the transactions.

Corus response

The VTA exists in the context of a number of other agreements referred to in the recitals, all of which were in existence well in advance of the approval of the VTA by the Commission on June 27, 2013.

The first agreement was that between Bell and Astral Media Inc. (Astral) dated March 16, 2012 and as amended on November 16, 2012 as noted in the recitals of the VTA. That agreement provided that Astral would sell its shares of the publicly-traded company to Bell.

The second agreement was that between Corus, Bell and Astral dated March 4, 2013 for the acquisition of certain assets including TELETOON.

So by the time that the Commission approved the VTA, it was clear that some assets would be passing to Corus (subject to Commission approval) and that the Trustee’s role was simply to be a custodian of the assets pending a decision of the Commission. The Trustee had no role in the sale process.

The Trustee is not required to approve the transaction between Bell, Astral and Corus but rather simply to deliver up the shares when so instructed by Bell.

Accordingly, under s. 4(f) of the VTA, once Commission approval is secured, the Trustee is then required to take such actions required to facilitate a change in effective control of the subject programming undertakings.

2. Transaction steps – Please refer to paragraph 10 of the supplementary brief and to your reply to question 3b) of your letter dated 12 June 2013. We note that since the filing of your application, you stated that alternative “A” will be followed.

a) Please confirm that you will not proceed with alternative “B” and that therefore you will not proceed with the steps explained at paragraph 10 (i.e. creation of Newco, acquisition of shares of the Family Channel Inc., and amalgamation steps). 3

Corus response

Corus confirms that we will not proceed with alternative “B”. The Newco identified in paragraph 10 of Corus’ Supplementary Brief is 8324441 Canada Inc., and not the Newco referenced in Step 1 of alternative “B”.

8324441 Canada Inc. will acquire the TELETOON shares held by Bell Media Inc. and 4116381 Canada Inc.; 8324441 Canada Inc. will not be acquiring shares in Family Channel Inc.

Subsequently, the amalgamation step set out in Step 2 of alternative “A” will proceed. As a result, the amalgamation step set out in Step 2 of alternative “B” will obviously not proceed.

b) As a follow-up to Decisions 2013-308, 2013-309, 2013-310, and of the administrative letter dated 27 June 2013, we understand that Bell Media Inc. currently holds 50% of the voting shares in 4116381 Canada Inc. and 40% of the voting shares in TELETOON Canada Inc. (TELETOON Canada) and that the Trustee controls the undertaking and the licensee.

i) Please confirm staff’s understanding.

Corus response

Pursuant to the Decisions noted above, we believe your understanding to be correct.

With regards to the matter of the Trustee’s role, please see response to question 1a); the Trustee does not control the undertaking and the licensee.

ii) Please indicate which sections of the Share Purchase Agreement will no longer be valid or accurate;

Corus response

We do not believe that any sections of the Share Purchase Agreement (SPA) are invalid or inaccurate. Section 9.15 of theSPA contemplates the reorganization outlined in Step 3 of Decision 2013-308 (the “NewHoldco” mentioned in the SPA is referred to as “Halftoon Newco” in Decision 2013-308). The role of the Trustee is also addressed in the SPA.

iii) explain why? (for example, section 9.15); and

Corus response

See response to question 2b)ii).

iv) indicate if they will be replaced or modified. 4

Corus response

There is no need to replace or modify any provisions of the SPA, since the SPA as a whole continues to be valid, accurate and binding.

Generally, contracts require an amendment to reflect changes agreed to by the parties after execution (e.g. change in the terms of the deal), omissions or errors. A contract does not require an amendment to reflect anything else, such as the satisfaction of conditions or the failure of certain scenarios to unfold if the contract contemplates those only as potential scenarios (e.g. “if [x] happens, then the parties shall do [y]”). In this example, if [x] does not happen, then there is no need to amend the contract to reflect that. If they wish, the parties may confirm to each other in writing outside of the contract that [x] did not happen, so that there is a record of that fact. But that confirmation is not legally required.

c) In light of the above-mentioned Decisions/Letter, please:

i) provide a step-by-step description of alternative “A”; and

Corus response

Please see alternative “A” included at paragraph 11 of the Supplementary Brief filed on April 17, 2013. The restructuring process set out as alternative “A” is still accurate.

ii) review staff’s understanding as presented in the Appendix to this letter and confirm. If not, detail.

Corus response

Corus has reviewed the Appendix to the Commission’s letter and has summarized below the corrections to be made:

Step 1 – Correct except New Family should be Family Step 2 – Correct Step 3 – Correct Step 4 – Correct percentages but Corus Entertainment Inc. will hold all voting shares and Nelvana Ltd. and YTV Canada Inc. will hold non-voting shares Step 5 – Steps 4 and 5 should be combined into one

d) You confirmed that the reorganisation process (shown in step 3 of the appendix to this letter) corresponds to an amalgamation. An amalgamation usually occurs between wholly owned entities. As it was explained, Nelvana Ltd. and YTV still ultimately hold voting share in TELETOON Canada, and would therefore be considered as sister companies. Please precisely detail how the amalgamation process will unfold as it involves sister companies, which is usually not possible in an amalgamation. 5

Corus response

Nelvana Ltd. and YTV Canada Inc. will hold non-voting shares. Amalgamations may occur between “sister companies” (horizontal amalgamation) or parent and subsidiary companies (vertical amalgamation).

TELETOON Canada Inc., 8324441 Canada Inc., 4116381 Canada Inc. and 4113756 Canada Inc. will amalgamate under ss. 181-183 of the Canada Business Corporations Act (CBCA).

In the case at hand, the “sister relationship” between Nelvana Ltd. and YTV Canada Inc. is irrelevant since they are not being amalgamated.

e) In your 12 June 2013 reply, you have indicated that the amalgamation process will result in the creation of TELETOON Amalco, which would therefore become the proposed licensee. Yet, in most the original documentation filed, 8324441 Canada Inc. (4441 Inc.) is the proposed licensee. Please clarify and resubmit Appendix 2A and Appendix 2B, if necessary.

Corus response

In paragraph 11 of the Supplementary Brief and as indicated in our response to question 2d) above and in our response to question 2d) dated June 12, 2013, TELETOON Canada Inc., 8324441 Canada Inc., 4116381 Canada Inc. and 4113756 Canada Inc. will amalgamate under ss. 181-183 of the CBCA.

The licensee will then be TELETOON Amalco.

A revised Appendix 2A is provided in response to question 2i) below.

f) Please explain whether TELETOON Amalco will be created through a simplified amalgamation and confirm that, at no time, will you proceed with a wind-up or any other form of amalgamation requiring the issuance of new licences.

Corus response

TELETOON Amalco will be created through a long-form process and we confirm that at no time will Corus proceed with a wind-up or other form of amalgamation that would require the issuance of new licences.

g) Please clarify the process whereby Nelvana Ltd. and YTV will become non-voting shareholders instead of voting shareholders of TELETOON Amalco, i.e. other than the issuance of shares to Nelvana Ltd. and YTV, what is the process by which original shares are withdrawn. Further, please file supporting documentation. 6

Corus response

Nelvana Ltd. and YTV Canada Inc.’s original voting shares in TELETOON Canada Inc. will be converted into non-voting shares as part of the amalgamation (see s. 182(c) of the CBCA).

Please see response to question 2h) for supporting documentation.

h) Please file a draft version of the articles of amalgamation.

Corus response

Appendix A attached is a draft version of the articles of amalgamation.

i) To complement your answer to question f) above, please file detailed information on TELETOON Amalco using Appendix 2A of the application form as a template.

Corus response

Appendix B attached is an Appendix 2A for TELETOON Amalco.

3. Share Purchase Agreement (SPA) – We note that throughout the SPA, you are indicating that further to the consummation of the transactions contemplated by the BCE/Astral Agreement, and by the corporate reorganisations, Bell will beneficially own and control the shares of TELETOON Canada or will have effective ownership of the licensee. Please file an attestation confirming that as contemplated in letter decision dated 27 June 2013:

a) the Trustee, Pierre Boivin, currently has and will continue to have (at all times) effective control of the licensee (TELETOON Canada) and its undertakings; and

Corus response

As explained earlier in our letter, the Trustee does not have effective control of the licensee TELETOON Canada Inc. and its undertakings (please see response to question 1a)).

b) the SPA will be amended accordingly.

Corus response

Section 9.2(a) of the SPA expressly contemplates the role of the Trustee, in a manner that corresponds to our explanation of the Trustee’s role in reply to question 3a) above. As a result there is no need to amend the SPA.

4. Cross-media ownership – As Shaw and Corus are under the effective control of JR Shaw, please refer to section 3 of the application form and resubmit it, considering that Shaw and Corus are part of the same ownership group. 7

Corus response

Shaw Media Inc. has prepared Appendix C attached, which contains the requested information regarding cross media ownership for this company.

Broadcasting programming analysis 5. Tangible benefits and funding - Please refer to the second to last paragraph of response 4a) and to 4c) of your 26 July 2013 response and indicate whether any entity in the Shaw/Corus group would have access to, or be directly involved with, such funding.

Corus response

Corus confirms that no entity in the Shaw/Corus group will have access to, or be directly involved, with such funding.

6. Competitive safeguards - In appendix 2 to Decision 2013-310, the Commission set out conditions of licence applicable to television programming undertakings and broadcasting distribution undertakings relating to the Code of conduct for commercial arrangements and interactions, tied selling, negotiation of non-linear rights, provision of a notice, access to advertising availabilities by competitors, requirement to file affiliation agreements and dispute resolution prior to the expiry of an affiliation agreement.

These remedies against anti-competitive behaviours were, as a condition of approval, to be added to the broadcasting licences for all undertakings that will be operated by a BCE-related entity following the close of the transaction between BCE and Astral.

Given that Shaw and Corus are part of the same ownership group, the size of the combined Shaw/Corus entity, and the resulting opportunity for anti-competitive behaviour, please provide the Commission with the following information:

a) Please comment on the applicability and relevance of remedies against anti- competitive behaviours such as those set out in Decision 2013-310 in the context the current transaction.

b) Please comment on the possible imposition, as a condition of approval of the transaction, of remedies against anti-competitive behaviours to be added as conditions of licence for all Corus-related services following the transaction.

c) Please comment on the individual conditions of licence set out in Appendix 2 of Decision 2013-310 and their applicability to Corus-related services.

Corus response to a), b) and c)

These questions raise important issues relating to the jurisdiction of the Commission and the nature of existing policies and regulations in existence outside of the (VI) Policy. 8

Corus submits that the Commission does not have the jurisdiction to amend conditions of licence for services that are not part of a proceeding. We submit that this would set a dangerous substantive and procedural precedent for the industry.

As a programming undertaking, the Corus networks are governed by the Commission’s undue preference rules. We are also not able to withhold our signals in the event of a disagreement. The existing rules on programming undertakings are substantial and clearly circumscribe behaviour.

That said, Corus is prepared to accept the conditions outlined in Appendix 2 of Broadcasting Decision CRTC 2013-310, as applicable to a programming undertaking (conditions of licence 1, 5-9, 11-13). We would accept these conditions on all of the television licences that are subject to this proceeding.

7. Calculation of CPE - TELETOON Canada is currently required to calculate its CPE on a cash basis. As of Broadcasting Decision CRTC 2011-446, services included in the Corus group are required to calculate their CPE on an accrual basis.

a) Please comment on the impact on your operations should TELETOON Canada’s CPE requirements, which are currently calculated on a cash basis, be calculated on an accrual basis for the next licence term.

b) Would you accept a condition of licence requiring you to fulfill TELETOON Canada’s CPE requirements on an accrual basis (with an exception for equity investments in Canadian feature films), with a 3-year adjustment period?

Corus response to a) and b)

In the context of the Group based licensing proceeding conducted in 2011, Corus indicated to the Commission that switching from calculating CPE on a cash basis to calculating CPE on an accrual basis would have a negative impact on the short-term profitability of any television service where such a change is mandated.

Corus accepts that the Commission has determined that Canadian television services must all calculate their CPE on an accrual basis (with the exception of equity investments in Canadian feature films) and therefore Corus is prepared to accept a condition of licence requiring TELETOON Canada to fulfil its CPE requirements on an accrual basis (with an exception for equity investments in Canadian feature films) with a 3-year adjustment period.

8. Group-based licensing - At paragraph 97 of the Supplementary brief, Corus indicates that it intends to include TELETOON and TELETOON Retro English within its existing group of English-language services from a group-based licensing perspective. Corus adds that it reviewed and supports the licence renewal applications by TELETOON Canada. As set out in Broadcasting Decision 2011-446, the Commission has established a minimum group CPE level of 30% for the Corus group and a minimum group expenditure requirement of 9% on PNI. Staff notes that the Commission could 9

impose requirements related to CPE and PNI as part of the services’ licence renewals. As such:

a) Please submit your proposed CPE and PNI requirements, along with the respective conditions of licence, for all the services that you wish to include in the Corus group as well as your justification (with detailed calculations).

Corus response

In its most recent licence renewal application, TELETOON Canada submitted a proposed CPE rate of 29%, which was based on its historical CPE (adjusted for CMF usage) using the 3-year broadcasting period of 2009–2011.

In Appendix 1 attached, Corus has updated the 3-year analysis for the 2010–2012 CRTC reporting periods resulting in a historical CPE rate of 28% (adjusted for CMF usage) for TELETOON Canada.

In Appendix 2 attached, Corus has calculated the historical CPE for TELETOON Retro English to be 4%. Under normal circumstances, Corus would have requested a 28% CPE rate for TELETOON and a 4% CPE rate for TELETOON Retro English.

However, given that all major media groups that operate under a group basis have an aggregate CPE rate of 30% and that this is the group CPE rate established by the Commission for Corus in Broadcasting Decision CRTC 2011- 446, we are proposing CPE rates of 31% for TELETOON and 16% for TELETOON Retro English, consistent with the current CPE rates established for Corus’ Category A and Category B specialty channels respectively.

Based on the analysis shown in Appendix 3 attached, this would not change the current Corus group rate when TELETOON and TELETOON Retro English are added to the Corus group of English-language television services.

Based on the 2010–2012 TELETOON and TELETOON Retro English CRTC Annual Returns, we have calculated TELETOON and TELETOON Retro English’s historical PNI to be 26% and 4% respectively (see Appendix 4 attached).

We are confident that the CRTC’s Annual Returns capture all of TELETOON and TELETOON Retro English’s PNI programming due to their natures of service as they would not air award shows or documentaries. Based on this information, we propose a PNI rate for TELETOON of 26% of prior year’s revenue and a PNI rate for TELETOON Retro English of 4% of prior year’s revenue.

As shown in Appendix 3 attached the inclusion of TELETOON and TELETOON Retro English into the Corus group of English-language television services at these proposed rates would increase the Corus group’s overall PNI rate to 12%. 10

TELETOON – Proposed conditions of licence for CPE and PNI

1. Except as otherwise provided for in conditions 4 and 6 and in accordance with A group-based approach to the licensing of private television services, Broadcasting Regulatory Policy CRTC 2010-167, 22 March 2010, the licensee shall in each broadcast year devote to the acquisition of or investment in Canadian programming 31% of the previous year’s gross revenues of the undertaking.

2. The licensee may count expenditures made for the acquisition of or investment in Canadian programming by one or more pay television services, specialty services or conventional television stations from the “Corus group” in the same broadcast year towards fulfilling the requirement in condition 1 as long as these expenditures are not used by those pay television services, specialty services or conventional television undertakings towards fulfilling their own Canadian programming expenditure requirement.

3. Except as provided for in conditions 4, 5 and 6 and in accordance with A group-based approach to the licensing of private television services, Broadcasting Regulatory Policy CRTC 2010-167, 22 March 2010 (Broadcasting Regulatory Policy 2010-167), the licensee shall in each broadcast year devote to the acquisition of or investment in programs of national interest, as defined in paragraphs 71 to 73 of Broadcasting Regulatory Policy 2010-167, 26% of the previous year’s gross revenues of the licensee.

4. The licensee may count expenditures made for the acquisition of or investment in programs of national interest by one or more pay television services, specialty services or conventional television stations from the “Corus group” in the same broadcast year towards fulfilling the requirement in condition 3 as long as these expenditures are not used by those pay television services, specialty services or conventional television stations towards fulfilling their own Canadian programming expenditure requirement.

5. At least 75% of the expenditures in condition 3 must be made to an independent production company.

6. In each broadcast year of the licence term, excluding the final year, where the licensee expends an amount for that year on Canadian programming or programs of national interest that is greater than the minimum required expenditure, the licensee may deduct that amount from the minimum required expenditure in one of more of the remaining years of the licence term. 11

TELETOON Retro English – Proposed conditions of licence for CPE and PNI

1. Except as otherwise provided for in conditions 4 and 6 and in accordance with A group-based approach to the licensing of private television services, Broadcasting Regulatory Policy CRTC 2010-167, 22 March 2010, the licensee shall in each broadcast year devote to the acquisition of or investment in Canadian programming 16% of the previous year’s gross revenues of the undertaking.

2. The licensee may count expenditures made for the acquisition of or investment in Canadian programming by one or more pay television services, specialty services or conventional television stations from the “Corus group” in the same broadcast year towards fulfilling the requirement in condition 1 as long as these expenditures are not used by those pay television services, specialty services or conventional television undertakings towards fulfilling their own Canadian programming expenditure requirement.

3. Except as provided for in conditions 4, 5 and 6 and in accordance with A group-based approach to the licensing of private television services, Broadcasting Regulatory Policy CRTC 2010-167, 22 March 2010 (Broadcasting Regulatory Policy 2010-167), the licensee shall in each broadcast year devote to the acquisition of or investment in programs of national interest, as defined in paragraphs 71 to 73 of Broadcasting Regulatory Policy 2010-167, 4% of the previous year’s gross revenues of the licensee.

4. The licensee may count expenditures made for the acquisition of or investment in programs of national interest by one or more pay television services, specialty services or conventional television stations from the “Corus group” in the same broadcast year towards fulfilling the requirement in condition 3 as long as these expenditures are not used by those pay television services, specialty services or conventional television stations towards fulfilling their own Canadian programming expenditure requirement.

5. At least 75% of the expenditures in condition 3 must be made to an independent production company.

6. In each broadcast year of the licence term, excluding the final year, where the licensee expends an amount for that year on Canadian programming or programs of national interest that is greater than the minimum required expenditure, the licensee may deduct that amount from the minimum required expenditure in one of more of the remaining years of the licence term.

9. Group-based licensing - Please comment whether the inclusion of some of these services into the Corus group could impact the overall group CPE and PNI requirements 12

set out in Broadcasting Decision CRTC 2011-446 and comment on whether the group requirements would remain appropriate. If not, please specify an appropriate adjusted group requirement for the Corus Group, taking into account the additional services that you propose to include. Additionally, please provide detailed calculations to justify this scenario.

Corus response

Please see response to question 8.

10. Canadian programming expense - In light of the elimination of the CMF licence-fee top-up as an eligible Canadian programming expense, please submit your proposed individual CPE requirements for each of the services, in addition to your justification.

Corus response

Please see response to question 8.

Corus appreciates the opportunity to address these questions. We remain available to respond to any further information requests if required.

Sincerely,

Sylvie Courtemanche Vice President, Government Relations Corus Entertainment Inc.

Attachment

Cc: Marie-Claire Bouthillier, CRTC Kevin Goldstein, Bell Media Inc. Pierre Boivin, Trustee

***End of document*** Appendix

1) 2) Corus Astral  Bell Corus Astral  Bell New Family  New Bell Media

YTV New Family YTV Canada, Inc. (Trustee) Canada, Inc. 8324441 Canada Inc.

50% 50% 50% 4116381 50% 4116381 Canada Inc. Canada Inc.

NelvanaLimited NelvanaLimited 4113756 4113756 Canada Inc. Canada Inc.

20% 20% 20% 20% 20% 20% 40% 40%

TELETOON TELETOON Canada Inc. Canada Inc. 3) 4) Corus Astral  Bell Corus New Family Control  New Bell Media Control

YTV YTV CorusEntertainment Canada, Inc. Amalgamation 8324441 NelvanaLimited Canada, Inc. Canada Inc. Inc.

20% 20% 60%

50% 4116381 50% Canada Inc. TELETOON Amalco (not 8324441 Canada Inc.) NelvanaLimited 4113756 Canada Inc. - Cartoon Network (Cat. B)

- TELETOON

- TÉLÉTOON Rétro (Cat. 2) 20% 20% 20% 40% - TELETOON Retro (Cat. 2)

TELETOON Canada Inc. 5)

Corus

Corus Entertainment Inc.

100%

TELETOON Amalco

- Cartoon Network

- TELETOON

- TÉLÉTOON Rétro

- TELETOON Retro APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED APPENDIX A ABRIDGED

TELETOON CANADA INC.

Form 2, Initial Registered Office Address and First Board of Directors

Schedule I

4 Members of the board of directors

Name Address Resident Canadian (Yes/No)

Heather A. Shaw Calgary, AB Yes

John Cassaday North York, ON Yes

Thomas C. Peddie Toronto, ON Yes

LEGAL_1:27797174.1 APPENDIX B ABRIDGED

APPENDIX 2A Section A Name of the APPLICANT Teletoon Amalco, OBCI

Definitions

2.1 Authorized Securities

Describe all categories of shares authorized to be issued.

Security Type Number of Votes Per Convertible Participating (6) Number of Shares Number Issued Share (y/n) (y/n) Authorized and Outstanding Common 1 n y unlimited Shares Class A special 0 n n unlimited shares Class B 0 n n unlimited special shares

2.2 Shareholding

Supply the details for each shareholder holding 10% or more of the voting shares(5), of the voting rights (if different from the voting shares), and of any other category of shares identified in the common shares(6) definition. For the remaining shareholders, (those holding less than 10%) supply the total shares under "Others Canadian" and "Others Non-Canadian".

Security Type Shareholder Name Complete Home Address or Legal Entity Canadian(2) Number of % (1) Jurisdiction (x) Shares Held Votes Corus Common Shares Entertainment Federal Corporation X 100

Inc.

2.3 Directors and Officers

Supply a list of the current/proposed directors and officers of the corporation (3) (4)

Name of Complete Home Address Canadian(2) Directors Date of Appointment Officer Position Directors/Officers (1) (x) Alberta Heather A. Shaw X TBD Chair

Ontario Chief Executive John Cassaday X TBD Officer Chief Financial Ontario Thomas C. Peddie X TBD Officer &

Treasurer APPENDIX B ABRIDGED

Ontario Doug Murphy President

Ontario Vice-President Judy Adam Finance Ontario Corporate Gary Maavara Secretary Assistant Ontario Randy Witten Corporate

Secretary

Exemption:

The applicant hereby confirms that :

: All ownership information for each of the entities that form part of the control chain has been supplied within the last 12 months from the date of this application, and accepted as satisfactory by the Commission; and

: No changes have occurred since the last filing that would be subject to a notification requirement or prior approval by the Commission pursuant to the Regulations; and

: No amalgamation has occurred.

date of filing of last complete update:

YY/MM/DD

APPENDIX 2A Section B Name of the Shareholder Corporation

Definitions

2.1 Authorized Securities

Describe all categories of shares authorized to be issued.

Security Type Number of Votes Per Convertible Participating (6) Number of Shares Number Issued APPENDIX B ABRIDGED

Share (y/n) (y/n) Authorized and Outstanding

2.2 Shareholding

Supply the details for each shareholder holding 10% or more of the voting shares(5), of the voting rights (if different from the voting shares), and of any other category of shares identified in the common shares(6) definition. For the remaining shareholders (those holding less than 10%), supply the total shares under "Others Canadian" and "Others Non-Canadian".

Security Type Shareholder Name (1) Complete Home Address or Legal Entity Canadian(2) Number of % Jurisdiction (x) Shares Votes Held

2.3 Directors and Officers

Supply a list of the present/proposed directors and officers of the corporation (3) (4)

Name of Complete Home Address Canadian(2) Directors Date of Officer Position Directors/Officers (1) (x) Appointment

For an additional APPENDIX 2A, copy tables 2.1, 2.2 and 2.3 on a new page

DEFINITIONS

(1) director/shareholder: If any of these persons hold public office, by election or appointment, indicate the office held under the name of the person(s).

APPENDIX B ABRIDGED

(2) Canadian: Specify if Canadian or Non-Canadian. If a person, CANADIAN means a Canadian citizen, ordinarily resident in Canada, and as defined in the Direction to the CRTC (Ineligibility of Non-Canadians) P.C. 1997-486 as amended by P.C. 1998-1268. If a corporation, CANADIAN means a "qualified corporation" as defined in the Direction to the CRTC (Ineligibility of Non-Canadians) P.C. 1997-486 as amended by P.C. 1998-1268.

(3) directors Means a person who is a member of the board of directors of a corporation or, where the corporation has no directors, a person performing functions that are similar to the functions performed by directors, as defined in the Direction to the CRTC (Ineligibility of Non-Canadians) P.C. 1997-486 as amended by P.C. 1998-1268.

(4) officers: Those persons designated as Chairman, President, Chief Executive Officer, Vice-President, General Manager, Secretary, Assistant-Secretary, Comptroller, Treasurer, Assistant-Treasurer or any others under similar titles.

(5) voting shares: The shares to which are attached one or more votes, and includes securities that are convertible into such shares at all times at the option of the holder.

(6) common shares: The shares that represent the residual equity in the earnings of the corporation, and includes securities that are convertible into such shares at all times at the option of the holder and the preferred shares to which are attached rights to participate in the earnings of the corporation with no upper limit.

(7) applicant/shareholder: If a person, refers to a person who has reached the age of majority.

APPENDIX C

3. Industry consolidation and cross-media ownership

3.1 Has the information in 3.2 been submitted to the Commission within the last 12 months: Yes ( ) No ( x) If yes, provide reference to the application containing this information: Application No.: ______Date filed:______If yes, proceed to section 4. If no, complete question 3.2.

3.2 Complete the following table, providing a list of all entities involved in any of the areas listed below, for which any investment (equity and/or debt securities) is held by the applicant, its directors, a corporation which directly or indirectly controls the applicant and any shareholder holding 20% or more of the voting interest of the applicant. The table may be appended as Appendix 3.

Business classification code Note: For all entities referenced by a * below, please see Shaw’s Broadcasting Ownership Information Annual Filing, filed March 5, 2013 (RAPIDS # 562860, Confirmation # 65808) for relevant information. a. Other CRTC licence holder and exempted undertakings Distribution Licensees: Shaw Pay-Per-View Ltd.* – Regional Shaw Pay-Per-View (television), and National Shaw Pay-Per-View (DTH) Star Choice Television Network Incorporated* – (DTH) Shaw Cablesystems Limited* – Terrestrial BDUs serving the following areas: (Chilliwack, Coquitlam, Courtenay, Duncan, Kamloops, , Langford, Nanaimo, New Westminster, (2 licenses), , White Rock); Alberta (Calgary, Edmonton, Fort McMurray, , Red Deer); (); Manitoba (Winnipeg); Ontario (Sault Ste-Marie, ) • Note that each of these licensees also operates a cable community channel. Inc.* – Terrestrial BDUs serving Edmonton and Winnipeg; and national VOD service, Shaw on Demand • Note that the licensees serving Edmonton and Winnipeg also operate a cable community channel. Shaw Fiberlink Ltd.* and Shaw Satellite Services Inc.* – Television Licensees: Shaw Cablesystems Limited* – CJBN-TV Shaw Television G.P. Inc.* (the general partner) and Shaw Media Global Inc.* (the limited partner), carrying on business as Shaw Television Limited APPENDIX C 2

Partnership* – CIHF-DT Halifax and its transmitters; CIHF-DT-2 Saint John and its transmitters; CKMI-DT-1 Montreal and its transmitters; CIII-DT-41 Toronto and its transmitters; CKND-DT Winnipeg and its transmitter; CFRE-DT Regina and its transmitter; CFSK-DT Saskatoon; CISA-DT Lethbridge and its transmitters; CICT-DT Calgary and its transmitters; CITV-DT Edmonton and its transmitter; CHBC-TV Kelowna and its transmitters; CHAN-DT Vancouver and its transmitters Shaw Cablesystems Limited and Videon Cablesystems Limited are shareholders in Cable Public Affairs Channel Inc., which operates CPAC.

Specialty and Digital Specialty Services Licensees: Food Network Canada Inc.* – Food Network Canada HGTV Canada Inc.* – HGTV Canada, DIY Network, Quest History Television Inc.* – History Television Showcase Television Inc.* – Showcase, Showcase Action, The Channel Canada, Lifetime Canada ULC* – Twist TV Life Network Inc.* – Slice Shaw Media Inc.* – Historia and Series+ NGC Channel Inc.* – National Geographic Channel, NatGeo Wild Jasper Broadcasting Inc.* – BBC Canada Shaw Television G.P. Inc.* (the general partner) and Shaw Media Global Inc.* (the limited partner), carrying on business as Shaw Television Limited Partnership* – MovieTime, DejaView, Reality TV, Shaw Media Sports, Specialty A, Plus BC Shaw Television G.P. Inc.* (the general partner) and Shaw Media Global Inc.* (the limited partner), carrying on business as Shaw Television Limited Partnership*, and Shaw Media Global Inc.*, partners in a general partnership carrying on business as Mystery Partnership* – Mystery Shaw Television G.P. Inc.* (the general partner) and Shaw Media Global Inc.* (the limited partner), carrying on business as Shaw Television Limited Partnership*, and Sports World Canada Holdco Inc.*, partners in a general partnership carrying on business as World Canada Partnership* – Shaw Television G.P. Inc.* (the general partner) and Shaw Media Global Inc.* (the limited partner), carrying on business as Shaw Television Limited Partnership*, and Shaw Media Global Inc.*, partners in a general partnership carrying on business as TVtropolis General Partnership* – TVtropolis Shaw Television G.P. Inc.* (the general partner) and Shaw Media Global Inc.* (the limited partner), carrying on business as Shaw Television Limited Partnership*, and Shaw Media Global Inc.*, partners in a general partnership carrying on business as Men TV General Partnership* – b. Daily newspaper N/A APPENDIX C 3

c. Non-daily newspaper or other media publisher Shaw Media creates, and engages freelance talent to create, certain news and other written and other digital content for use and exploitation on its various web properties and, in particular, its news and lifestyle-brand websites. The relevant Shaw Media entities involved in this are as follows: Shaw Media Inc.* Shaw Television G.P. Inc.* and Shaw Media Global Inc.*, carrying on business as Shaw Television Limited Partnership* d. Production or distribution of programming material Shaw Media does not currently carry-on a standing content production business other than with respect to its production of news content (Global National and Global Local News (“News”)) and Entertainment Tonight Canada (“ETC”). In addition, from time to time, Shaw Media may produce a very limited number of one-off television productions from time to time (e.g. certain award shows) or audio-visual and other content intended for exploitation on its digital properties. The balance of content currently telecast on Shaw Media broadcasting undertakings is either commissioned as original production from independent producers or licensed from third-party distributors. The relevant Shaw Media entities involved in production are as follows:

Shaw Media Inc.*; and Shaw Television G.P. Inc.* and Shaw Media Global Inc.*, carrying on business as Shaw Television Limited Partnership*;

Please note that: (i) production activities do not represent the bulk of business of the entities named above; (ii) Shaw Media undertakes production of certain advertising content for its advertising clients; (iii) in certain circumstances, and from time to time, Shaw Media may also incorporate wholly-owned special purpose production entities to produce individual one-off programs; and (iv) there are certain inactive wholly-owned special purpose production entities that continue to subsist solely for the purpose of holding copyright in and to programs produced by it for predecessors to Shaw Media (e.g. (broadcast business) production entities).

Shaw Media does not currently carry-on a content distribution business. e. Lessor of property, plant or equipment of applicant N/A f. Telecommunications company regulated under the Telecommunications Act Shaw Telecom Inc. and Shaw Business Inc., carrying on business as Shaw Telecom G.P. – Provides Shaw Home Phone services Shaw Communications Inc.* and Shaw Cablesystems Limited*, carrying on business as Shaw Cablesystems G.P. – Provides internet service

APPENDIX C 4

g. Company owning securities in any of categories (a) to (f) Securities holders in Shaw Telecom Inc.:

Name of Security Holder Business Securities Held Classification Code

Class or VOTE % held description of compared to securities held number Y N issued

Shaw Communications Inc.* F, G Class A Common X 100%

The directors of Shaw Telecom Inc. are JR Shaw, Brad Shaw, Peter Bissonnette and Steve Wilson. Securities holders in Shaw Business Inc.:

Name of Security Holder Business Securities Held Classification Code

Class or VOTE % held description of compared to securities held number Y N issued

Shaw Communications Inc.* F, G Class A Common X 100%

The directors of Shaw Business Inc. are JR Shaw, Brad Shaw, Peter Bissonnette and Steve Wilson. APPENDIX 1

TELETOON HISTORICAL CPE (Using 2010 - 2012 CRTC Return Information)

2010 2011 2012 Avg Prior Year's Revenue 76,268 83,823 89,301 83,131 CPE 29,093 38,432 35,433 34,319 CMF top up 7,113 15,165 10,663 10,980 CPE without CMF top up 21,980 23,267 24,770 23,339 CPE % 29% 28% 28% 28%

TELETOON HISTORICAL CPE (Using 2009 - 2011 CRTC Return Information)

2009 2010 2011 Avg Prior Year's Revenue 81,630 76,268 83,823 80,574 CPE 33,758 29,093 38,432 33,761 CMF top up 8,859 7,113 15,165 10,379 CPE without CMF top up 24,899 21,980 23,267 23,382 CPE % 31% 29% 28% 29% APPENDIX 2

TELETOON RETRO ENGLISH HISTORICAL CPE (Using 2010 - 2012 CRTC Return Information)

2010 2011 2012 Avg Prior Year's Revenue 3,856 5,467 6,454 5,259 CPE 217 202 241 220 CMF top up - - - - CPE without CMF top up 217 202 241 220 CPE % 6% 4% 4% 4% APPENDIX 3

Corus Entertainment Inc. Calculation of Corus Group CPE & PNI Percentages Including Teletoon & Teletoon Retro English Information taken from 2010 -2012 CRTC Annual Returns (except Teletoon & Teletoon Retro CPE)

Corus New CPE Calculation: Corus Total Corus Corus Corus Total Teletoon Incl. Teletoon Specialty/Pay Conventional Excl-Teletoon Teletoon Retro E & Retro E Prior Year's Revenue - 3 Year Average 395,803,883 15,848,668 411,652,551 83,130,501 5,259,007 500,042,059

CPE $ Expenditure 117,326,935 4,437,627 121,764,562 25,770,455 841,441 148,376,459

CPE % Requirement 30% 31% 16% 30%

Corus New PNI Calculation: Corus Total Corus Corus Corus Total Teletoon Incl. Teletoon Specialty/Pay Conventional Excl-Teletoon Teletoon Retro E & Retro E Prior Year's Revenue - 3 Year Average 395,803,883 15,848,668 411,652,551 83,130,501 5,259,007 500,042,059

PNI $ Expenditure 35,622,349 1,426,380 37,048,730 21,613,930 210,360 58,873,020

PNI % Requirement 9% 26% 4% 12% APPENDIX 4

Corus Entertaiment Inc. Calculation of Teletoon & Teletoon Retro English Program of National Interest (PNI) Percentage Information taken from 2010 -2012 CRTC Annual Returns

Teletoon PNI Calculation: 2010 2011 2012 Average

Prior years revenue 76,267,679 83,822,937 89,300,886 83,130,501 PNI Programming Expenditures Category 7 19,967,730 21,234,331 23,008,065 21,403,375 Category 2b - - - - Award Shows - - - - Total PNI Programming Expenditures 19,967,730 21,234,331 23,008,065 21,403,375 PNI Percentage 26% 25% 26% 26%

Teletoon Retro English PNI Calculation: 2010 2011 2012 Average

Prior years revenue 3,856,276 5,467,072 6,453,674 5,259,007 PNI Programming Expenditures Category 7 174,555 202,430 241,259 206,081 Category 2b - - - - Award Shows - - - - Total PNI Programming Expenditures 174,555 202,430 241,259 206,081 PNI Percentage 5% 4% 4% 4% Via GCKey

August 15th, 2013

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2

Dear Mr. Traversy:

Re: TELETOON Canada Inc. – Various Undertakings – Transfer of Shares and Acquisition of Assets - Change in Effective Control – Application No: 2013-0596-2 – Response to Deficiency Letter Dated August 14th, 2013

Corus Entertainment Inc. (Corus), on behalf of TELETOON Canada Inc. (TELETOON) hereby provides its response to the Commission’s deficiency letter dated August 14th, 2013.

The Commission’s questions are reproduced below with the Applicant’s response provided in bold.

11. Shaw and Corus as a group – The supplementary brief filed with this application states the following:

"Corus Entertainment Inc. (Corus) is a company that is ultimately controlled by the JR Family Trust, which also owns and operates Shaw Communications Inc. and Shaw Media Inc. (Shaw). Corus and Shaw Media are completely separate, however, for the purposes of the Commission’s analysis, below are Shaw Media Inc.’s English audience 2+ shares, 22.40% share in 2011 for Shaw services and 35.83% share in 2011 for Corus/Shaw services”.

a) Please provide the audience 2+ shares for the broadcast year 2011-2012 for both Shaw and Corus/Shaw. 2

Corus response

The share of audience 2+ for the broadcast year 2011-2012 for Shaw is 23.3% and for Corus / Shaw is 36.1%. For additional detail, please see the response to question 11b).

b) In the event that the Trustee’s approval is required in order to proceed with the current transaction, please file an executed copy of the document signed by the Trustee giving the right to Bell to act on its behalf and giving its approval to proceed with the transactions.

Corus response

The following table shows the share of audience 2+ for the broadcast year 2012 and the broadcast year 2013 year to date (YTD) as of August 4, 2013.

2012 2013 YTD Shaw Media 23.3% 23.8% Corus Entertainment 12.8% 13.4% Total 36.1% 37.1%

Please note the following with regard to the methodology:

 Total viewing is based on viewing to all Canadian conventional stations (including ethnic stations) and Canadian discretionary services (specialty, pay, and the on demand versions of same, excluding PPV services) for all persons 2+, Monday- Sunday 2a-2a in keeping with the calculation used in table 4.3.9 of the 2012 Communication Monitoring Report published by the Commission.

 2012 figures represent the 2011-2012 broadcast year, specifically 29 August 2011 to 26 August 2012.

 2013 YTD figures represent the 2012-2013 broadcast year to date, specifically 27 August 2012 to 4 August 2013. Rather than provide an estimate for the year, we have provided the actual confirmed data for the broadcast year to date. We do not expect these share percentages to materially change between now and the end of the broadcast year.

 Shaw and Corus figures are shown pro-forma for the transactions contemplated in the applications currently being reviewed by the Commission as well as those applications approved since the publication of the 2012 Communications Monitoring Report, specifically:

o Shaw Media includes the audience share related to Mystery but excludes Historia and Séries+. 3

o Corus Entertainment includes Historia, Séries+, TELETOON, TELETOON French, TELETOON Retro English, TELETOON Retro French, and Cartoon Network.

o In addition, it should be noted that in 2012 total viewing for HBO has been included in the calculation of the Corus share. In 2013, only the viewing attributable to HBO-West is included in the Corus share, as Corus does not own HBO-East. Prior to the 2013 broadcast year, it was not possible to split out the East and West audience statistics of HBO.

 Perhaps most importantly, it should be noted that these transactions have no impact on the combined market share of Shaw and Corus because previous calculations of combined market share included joint ventures at 100%. In other words, this transaction does not change the market share.

 Our growth in market share since broadcast year 2011 has been due to organic growth from existing channels due to Corus’ investment in programming as well as new channel launches such as ABC Spark and Cartoon Network which have delivered powerful brands and new programming to Canadian audiences. We are pleased to report that our Canadian Content is attracting larger audiences.

Corus appreciates the opportunity to address these questions. We remain available to respond to any further information requests if required.

Sincerely,

Sylvie Courtemanche Vice President, Government Relations Corus Entertainment Inc.

Cc: Marie-Claire Bouthillier, CRTC Kevin Goldstein, Bell Media Inc. Pierre Boivin, Trustee

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