Court File and Parties

Court File No.: CL-25-00753558-0000 Date: 2025-11-04 Superior Court of Justice – Ontario (Commercial List)

RE: In the Matter of an Application Under Section 192 of the Canada Business Corporations Act

AND

In the Matter of a Proposed Arrangement of Corus Entertainment Inc. and 17311737 Canada Inc.

Involving: 1078959 Ontario Inc., 1078960 Ontario Inc., 1078961 Ontario Inc., 1421711 Ontario Inc., 3412831 Canada Inc., 3470644 Canada Inc., 4032942 Canada Inc., 591987 B.C. Ltd., 591989 B.C. Ltd., 7202377 Canada Inc., 8135274 Canada Inc., 8504644 Canada Inc., 923774 Alberta Ltd., Corus Media Holdings Inc., Corus Radio Inc., Corus Sales Inc., Corus Television G.P. Inc., Country Music Television Ltd., Corus Lifestyle Television Inc., Kids Can Press Ltd., Nelvana Enterprises Inc., Nelvana International Limited, Nelvana Limited, Nelvana Publishing Limited, Quay Media Services Inc., Showcase Television Inc., Teletoon Canada Inc., United Broadcast Sales Limited, W Network Inc., YTV Canada, Inc., YTV Productions Inc., The Corus Investment Partnership, TVTropolis General Partnership (General Partnership Formed Under the Partnership Act of Ontario), Men TV General Partnership, Mystery Partnership, and Corus Television Limited Partnership

Before: Kimmel J.

Counsel:

• Mark Wasserman, Jeremy Dacks, Michael De Lellis, Martino Calvaruso, & Marleigh Dick, for the Applicants, Corus Entertainment Inc. and 17311737 Canada Inc.
• Sean Zweig & Jamie Ernst, for the Ad Hoc Committee of Senior Unsecured Noteholders
• Robert Thornton, Mitch Grossell, Denna Jalili, & Daniel Alievsky, for the Major Noteholder/Lender, Canso Investment Counsel Ltd.

Heard: November 3, 2025

Endorsement (Preliminary Order)

This Preliminary Motion and Stay

1Corus Entertainment Inc. ("Corus Entertainment" or the "Company") and 17311737 Canada Inc. ("ArrangeCo") (together, the "Applicants") sought and were granted on November 3, 2025 a preliminary interim order (the "Preliminary Interim Order") in connection with a proposed arrangement (the "Arrangement") under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended (the "CBCA"). The order was signed on November 3, 2025 with reasons to follow. These are the reasons.

2Capitalized terms not otherwise defined in this endorsement shall have the meanings ascribed to them in the affidavit sworn on November 2, 2025 in support of this application and preliminary motion by the current Chief Executive Officer and Chief Financial Officer of Corus Entertainment, John Gossling (the "Gossling Affidavit").

3This motion was not brought on notice to all stakeholders. It was on notice only to certain noteholders/lenders and the holders of the voting (non-public) shares that have already confirmed their support the Arrangement and their support for the preliminary relief sought by the Applicants in furtherance of the Arrangement. These are not the only stakeholders that will be affected by the Arrangement, but they are stakeholders whose support is essential to the pursuit of the Arrangement. The signing a series of support agreements and related term sheets and documents with certain key creditors and shareholders just prior to the November 3, 2025, motion, with the approval of the Corus Entertainment Board of Directors, enabled the Application and this preliminary motion to proceed.

4All affected stakeholders will eventually be given notice of this application at the appropriate time. In the meantime, a press release was issued by Corus Entertainment immediately after the court confirmed that the Preliminary Interim Order would be granted. The Preliminary Interim Order contains full come back rights for all interested parties by motion to be made on seven days' notice.

5The main focus of this Preliminary Interim Order is the stay of rights and remedies (the "Stay") against the "Corus Entities" defined as: the Applicants, the Existing Senior Notes Guarantors, the Non-Guarantor Stay Parties, and any other direct or indirect subsidiary or controlled affiliate of Corus (including the non-applicant related entities listed in the style of proceedings as entities involved in the Arrangement and contemplated restructuring).

6The Stay is set to expire on December 18, 2025. It is only in respect of the exercise of rights or remedies arising upon any default or event of default under the Senior Notes, the Indentures or any other Senior Notes Documents, or arising under any contract or agreement with other counter parties as a result of this Application, the involvement of any of the Corus Entities in this proceeding or in the Arrangement or the Recapitalization Transaction, or due to cross-defaults with Senior Notes, the Indentures or any other Senior Notes Documents.

7The Stay very specifically does not affect the obligations or day to day business dealings of the Corus Entities with trade creditors, suppliers, customers or other parties whose interests are not being arranged. Further, all obligations to employees of the Corus Entities (for salary, wages, retention payments, benefits or otherwise) will be unaffected by the Arrangement and contemplated restructuring.

8The Applicants consider the Preliminary Interim Order and Stay to be critical to their planned progression to a meeting and vote of stakeholders affected by the Arrangement, which they intend to call and hold in accordance with an Interim Order that they plan to seek from the court prior to December 1, 2025. Upon finalizing the terms and definitive documentation, the Applicants intend to bring forward a motion in these proceedings for an Interim Order authorizing the Applicants to call and hold one or more meetings of security holders to vote on the Arrangement and, subject to receipt of necessary approvals, a motion for a final order approving the Arrangement under s. 192(3) of the CBCA.

9They need the Stay in the meantime to create the breathing space necessary for them to finalize the definitive documents for the intended Recapitalization Transaction. The Stay will give Corus Entertainment the stability needed to do all of this and to maintain its enterprise value which it says would be jeopardized if it were to wait for the Recapitalization Transaction to be fully documented before seeking any relief from the court. The Applicants wanted Corus Entertainment to be able to immediately announce that it has executed the Support Agreement and related term sheets and agreements at the same time as the announcing the Preliminary Interim Order with a tailored and limited Stay.

10The Stay is intended to maintain the status quo while affording a reasonable but not indefinite amount of time to the Corus Entertainment to negotiate with stakeholders to see if it can put forward a proposal that will be approved at the planned meeting by the requisite percentage of creditors and other stakeholders whose rights are being arranged. This breathing space is needed because of the complexity of the proposed Arrangement, the current state of Corus Entertainment's balance sheet, the regulatory environment in which Corus Entertainment operates, and the desire and intention of the Applicants for the Corus Entities to continue to carry on business in the normal course during this interim period. It is also intended to allow time for Corus Entertainment to present its proposed restructuring plan to the Canadian Radio-television and Telecommunications Commission (the "CRTC") for feedback before the plan is put a vote of affected securityholders.

11The extension of the Stay to non-applicant affiliates of Corus Entertainment is necessary because of guarantees that have been provided by some subsidiaries and because of the integrated nature of the business of all of the Corus Entities to which the Stay applies. This includes certain wholly-owned subsidiaries who are Guarantors under the Credit Agreement and Senior Unsecured Notes, as well as non-guarantor direct and indirect subsidiaries that are functionally integrated and embedded within the overall corporate and business structure, many of which hold copyright and intellectual property rights, have contractual relationships with critical suppliers and other third parties, and are engaged in important aspects of the overall Corus Group business.

12The court has granted interim stays of this nature under its broad authority to "make any interim or final order it thinks fit" under s. 192(4) of the CBCA, including to non-applicant affiliates. This was done in Xplore Inc. (Re), 2024 ONSC 3251 and Concordia (Re), 2017 ONSC 6357, 53 C.B.R. (6th) 46, and other cases cited in footnote 103 of the Applicants' factum.

13The Preliminary Interim Order also preserves the ability of the Corus Entities to pivot to a Companies' Creditors Arrangement Act, RSC 1985, c C-36 ("CCAA") proceeding if a transaction cannot be effectuated under the CBCA, although the CBCA is the preferred route at this time.

Background to the Arrangement

14Through an extensive formal process to evaluate strategic alternatives (the "Strategic Review") with the assistance of professional advisors, Corus Entertainment has concluded that it is in the best interests of the Company and its stakeholders to proceed with the transaction (the "Recapitalization Transaction") by means of the Arrangement under s. 192 of the CBCA. The Recapitalization Transaction will position the Company to continue as a going concern for the benefit of all stakeholders including approximately 2,261 employees and dozens of independent contractors across Canada. The particulars of the proposed Recapitalization Transaction are set out in the materials filed for this motion but need only be considered at a very high level at this time.

15The Recapitalization Transaction is expected to significantly reduce the Company's debt and annual cash interest costs and extend maturity dates on its debt.

16Corus Entertainment is a public company incorporated under the CBCA. It has two classes of shares: private Class A voting shares (the majority of which are owned by the Shaw Family Living Trust and its affiliates) and public Class B non-voting shares that are traded on the Toronto Stock Exchange ("TSX"). Under the proposed Restructuring Transaction, upon implementation NewCo will have three classes of authorized voting shares (the "New Shares"). The existing Class A and B Shares will comprise 1% of the issued and outstanding New Shares and $500 Million of the Senior Unsecured Notes will be converted into 99% of the New Shares. Various debt holders will be offered rights of participation in the new debt and warrants will also be available to some debt holders.

17With assets and liabilities in the billions of dollars, as at August 31, 2025, the total liabilities of Corus Entertainment exceeded its total assets and its shareholders' equity was negative. The last two annual consolidated financial statements of Corus Entertainment have contained going concern notes. This has made it difficult for it to negotiate in the normal course because of questions about its continued viability. It is hoped that the announcement of this Recapitalization Transaction will provide stability and certainty as the Corus Group enters the fall premiere season that is crucial for their business and programming content.

18Canadian broadcast licence holders such as Corus Entertainment are heavily regulated by the CRTC. Regulatory approvals or consents will be required for aspects of the proposed Recapitalization Transaction. The Applicants wanted to have the Preliminary Interim Order in place and the breathing room and stability that it affords them before approaching the CRTC about the regulatory aspects of the Recapitalization Transaction.

The Test for the Preliminary Interim Order

19The requirements for obtaining a Preliminary Interim Order were set out in the court's decision in Xplore Inc. (Re), 2024 ONSC 3251, as follows:

[22] On an application for approval of the Arrangement under s. 192 of the CBCA, the Applicants must satisfy the Court that (a) the statutory requirements under the CBCA have been fulfilled; (b) the Arrangement is put forward in good faith; and (c) the Arrangement is fair and reasonable.

[23] On an interim motion (or, as in this case, a preliminary interim motion) the court generally limits the analysis to:

a. the Applicants' compliance with the statutory requirements of the CBCA; and

b. the Applicants' good faith in putting forward the Arrangement.

See Concordia (Re), 2017 ONSC 6357, 53 C.B.R. (6th) 46, at para. 24, citing Re 8440522 Canada Inc., 2013 ONSC 2509, at para. 41 [Mobilicity] and 45133541 Canada Inc., Re, 2009 QCCS 6444 [Abitibi], at para. 53.

The Statutory Requirements

24The statutory requirements of the CBCA for the approval of an arrangement require the Applicants to establish that:

a. the Arrangement constitutes an "arrangement" within the meaning of s. 192(1) of the CBCA;

b. the Applicants are not "insolvent" within the meaning of s. 192(2) of the CBCA;

c. it is not practicable for the Applicant to effect a fundamental change in the nature of the Arrangement under any other provision of the CBCA; and

d. the Applicants have given the Director appointed under s. 260 of the CBCA (the "CBCA Director") notice of this Application.

20The Applicants have established that there is a reasonable basis for the court to conclude that the statutory requirements under the CBCA appear to have been satisfied for purposes of this Preliminary Interim Order, for the reasons detailed in the Applicants' factum filed on this motion, and supported by the Gossling Affidavit. By way of summary:

a. There is a reasonable basis for the court to conclude at this stage that the proposed Arrangement is eligible to proceed as an "arrangement" under s 192 of the CBCA, since it involves the exchange of securities (which may include shares or debt obligations, e.g. see Xplore, at para. 27) of one company (Corus Entertainment) for property, money or other securities of another company (NewCo, a company to be incorporated as part of the Recapitalization Transaction). The court need not go further than this for now. Other cases have granted this type of preliminary interim order in anticipation of an arrangement not yet finalized: See e.g., Xplore, at para. 32, citing Concordia and 12178711 Canada Inc. v. Wilks Brothers LLC, 2020 ABCA 313, 82 C.B.R. (6th) 167.

b. Canadian Courts have held that the solvency requirement under s. 192(3) is satisfied where (a) at least one of the applicant companies is solvent, or (b) where the applicant will be solvent after the arrangement is implemented. See Xplore, at para. 34, citing Concordia, at paras. 33–35; Re Essar Steel Canada Inc., 2014 ONSC 4285, at paras. 36–39; Mobilicity, at para. 53. Following completion of the Recapitalization Transaction, it is expected that the realizable value of Corus Entertainment's assets will not be less than the aggregate value of its liabilities and stated capital, and that the Applicants will not be unable to meet their obligations as they become due. In addition, at the time of the Application to approve the Transaction, it is expected that at least one of the Applicant companies will be solvent because ArrangeCo has no liabilities and is solvent.

c. The essential characteristic of an arrangement is a "fundamental change which could not be otherwise achieved under the CBCA" (see BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, [2008] 3 S.C.R. 560, at paras. 124–25; and Re Fairmont Hotels & Resorts Inc., [2006] O.J. No. 5591 (S.C.), at para. 5; Concordia, at paras. 26–29; RGL, at para. 25). The impracticability requirement may be satisfied in cases where the implementation of complex or multi-step transactions can be accomplished "far more efficiently by means of a plan of arrangement": see Xplore, at para. 37, citing Mobilicity, at para. 63; see also Concordia, at para. 38. It is anticipated that the Recapitalization Transaction will involve the redemption and/or repayment in full of the Term Loan Facility (or an exchange for the New First Lien Notes) and the issuance of the New First Lien Notes including an additional payment of $1,098,032.83 to the Lenders under the Term Loan Facility, along with an exchange of the Senior Unsecured Notes for new debt of Corus Entertainment and equity interests of NewCo and the exchange of existing shares of Corus Entertainment for New Shares. Such actions could not be completed without consent from 100% of the Lenders or Senior Unsecured Noteholders of such debt outside of a CBCA arrangement. Any alternative to the Arrangement would increase the complexity of the Recapitalization Transaction, the time required to complete it, and the costs involved. It may also increase the risk of non-completion.

d. As is customary at this early Preliminary Interim Order stage, the staff of the CBCA Director have advised the Applicants that the Director does not have standing to review or take a position on this application, as there is no arrangement to be reviewed at this time. The expectation is that the CBCA Director will review and provide a position on the Arrangement in advance of the next request for an Interim Order and/or in advance of any final approval order that may be sought. For the immediate purposes of this Preliminary Interim Order, it is sufficient that the CBCA Director has been given notice of this Application.

21Courts have concluded that applicants are acting in good faith where there is a valid business purpose for an arrangement, such as reducing debt to strengthen a company's financial position and to put the Company on a strong financial footing in order to execute on its business plan moving forward: see Xplore at paras. 42-43; Concordia at para. 40. The proposed Recapitalization Transaction follows a formal Strategic Review and is supported by key stakeholders. It has been identified as the only actionable option that provides a long-term solution for the Corus Group's financial challenges. The Applicants have advanced at this stage a reasoned justification for their pursuit of the Arrangement and they appear to be acting in good faith.

Preliminary Interim Order

22For all of the foregoing reasons, I was satisfied that the requested Preliminary Interim Order should be granted in these circumstances and it was signed before the markets opened on Monday on November 3, 2025. It will serve the intended purpose of preserving the status quo as the Applicants work to advance and finalize the terms of the Recapitalization Transaction, to return to court for an Interim Order and to ultimately seek court approval of their proposed Arrangement, if the requirements for doing so are met.

23The Applicants shall arrange for the hearing of the motion for an Interim Order for Advice and Directions from the court regarding the calling, holding and voting on the proposed Arrangement and Recapitalization Transaction, which the court expects to be on notice to, at a minimum, any interested party that has delivered a Notice of Appearance in accordance with the Preliminary Interim Order, and any party who has indicated that they wish to be given notice of any future steps in this proceeding. In advance of the hearing for an Interim Order, consideration should also be given by the Applicants to whether there are any other known stakeholders whose rights and interests may be affected by the Arrangement who should be on notice of the motion for the Interim Order.

Kimmel J.