One UK Ltd Exchangeable Notes

On 9 January 2008 E-One UK Ltd, a UK subsidiary of Entertainment One Cayman, issued £19,600,000 aggregated principal guaranteed senior subordinated Exchangeable Notes maturing September 2013. The Exchangeable Notes attract an accrued interest of 10 per cent. per annum payable on maturity. The Exchangeable Notes are currently exchangeable for ordinary shares in Entertainment One Cayman. After the Transaction Time, the £5,100,000 Exchangeable Notes that are not held intra-group will be exchangeable for 7.5 million common shares in Entertainment One Canada at £0.68 per common share.

Accounting Treatment of the Scheme

The Scheme of Arrangement represents a reverse acquisition under International Financial Reporting Standard 3 Business Combinations. As such the transaction will be accounted for as if Entertainment One Cayman is acquiring Entertainment One Canada. The effect of this is that the underlying net assets of the group will not alter as a result of the transaction, with the exception of share capital which will reflect the share capital of Entertainment One Canada.

Required Vote; Board Recommendation

The Court Meeting will be conducted in accordance with the directions of the Cayman Court. The presence in person or by proxy of at least two registered holders of Entertainment One Cayman ordinary shares is required to constitute a quorum. Assuming the presence of a quorum at the meeting, the Scheme of Arrangement must be approved by a majority in number of the Scheme Shareholders present and voting on the proposal, whether in person or by proxy, representing 75 per cent. or more in value of the Entertainment One Cayman ordinary shares present and voting on the proposal, whether in person or by proxy.

Admission to the Official List

Application has been made to the UK Listing Authority for the Entertainment One Canada common shares to be listed on a standard listing on the Official List and for the Entertainment One Canada common to be admitted to trading on the London Stock Exchange’s main market for listed securities. It is expected that Admission will become effective and the dealings in the Entertainment One Canada common shares will commence at 8.00 a.m. BST on Thursday 15 July 2010.

Admission to the Official List is conditional upon the Scheme of Arrangement becoming effective. Accordingly, if Scheme Shareholders do not vote to approve the Scheme of Arrangement proposal, the Admission will not take place and Entertainment One Cayman ordinary shares will continue to be admitted to trading on AIM. Scheme Shareholders are not being asked to vote in respect of the Admission however by approving the Scheme of Arrangement; the Scheme Shareholders are in fact facilitating the Admission. Reasons for moving to the Official List

Since its admission to AIM in 2007, the Group has expanded significantly through organic and acquisitive growth and as a result, the Directors believe that a move to a standard listing on the Official List and to trading on the main market of the London Stock Exchange is now appropriate. The Directors also believe that Admission would also provide improved liquidity of the Entertainment One Canada common shares, and enhanced corporate exposure to an enlarged investor base.

UK Listing and Reporting Obligations

The Entertainment One Canada common shares are expected to be admitted to a standard listing on the Official List. A standard listing is different to a premium listing and as a consequence additional on-going requirements and protections applicable to a premium listing under the Listing Rules will not apply to Entertainment One Canada.

Entertainment One Canada will be listed under Chapter 14 of the Listing Rules on the basis of European Directive requirements and as a consequence a significant number of the Listing Rules will not apply to Entertainment One Canada. The listing will be classified as a standard listing under the Listing Rules. Shareholders in Entertainment One Canada will therefore not receive the full protections of the Listing Rules otherwise associated with a premium listing.

An applicant that is applying for a standard listing of equity securities must comply with all the requirements listed in Chapter 2 of the Listing Rules, which specifies the requirements for listing for all securities. Where an application is made for the admission to the Official List of a class of shares, at least 25 per cent. of shares of that class must be distributed to the public in one or more EEA states.

Listing Rule 14.3 sets out the continuing obligations applicable to Entertainment One Canada and requires that Entertainment One Canada’s listed securities must be admitted to trading on a regulated market at all times. The applicant must have a minimum number of shares of any listed class (25 per cent. ) in public hands at all times in the relevant jurisdictions and must notify the FSA as soon as possible if these holdings fall below the stated level. There are a number of other continuing obligations set out in Chapter 14 of the Listing Rules that will be applicable to Entertainment One Canada.

These include requirements as to:

(a) forwarding of circulars and other documentation to the FSA for publication through the document viewing facility, and related notification to a regulatory information service;

(b) the provision of contact details of appropriate persons nominated to act as a first point of contact with the FSA in relation to compliance with the Listing Rules and Disclosure and Transparency Rules; (c) the form and content of temporary and definitive documents of title;

(e) regulatory information service notification obligation in relation to a range of debt and equity capital issues; and

(f) compliance with, in particular, Chapters 4, 5 and 6 of the Disclosure Rules and Transparency Rules (relating to financial reporting, vote holder and issuer notification rules and continuing obligations and access to information).

A shareholder in Entertainment One Canada whose common shares are admitted to trading on the main market of the London Stock Exchange is required pursuant to Rule 5 of the Disclosure and Transparency Rules to notify Entertainment One Canada of the percentage of their voting rights if the percentage of voting rights which they hold as a shareholder or through their direct or indirect holding of financial instruments (or a combination of such holdings) reaches, exceeds or falls below 5%, 10%, 15%, 20%, 25%, 30%, 50% and 70% as a result of an acquisition or disposal of shares.

Chapter 14 of the Listing Rules, which sets out the requirements for standard listings, does not require Entertainment One Canada to comply with, inter alia, the provisions of Chapters 6 to 13 of the Listing Rules being additional requirements for listing of equity securities (listing principles, sponsors, continuing obligations, significant transactions, related party transactions, dealing in own securities and treasury shares and contents of circulars).

Chapter 6 of the Listing Rules contains additional requirements for listing of equity securities, which are only applicable for companies with a “premium” listing. Consequently, Entertainment One Canada does not intend to comply with such provisions.

Entertainment One Canada intends to comply with the Listing Principles set out in Chapter 7 of the Listing Rules which would otherwise apply to Entertainment One Canada if it were to obtain a premium listing on the Official List. Entertainment One Canada is not, however, subject to such Listing Principles and will not be required to comply with them. The directors of Entertainment One Canada intend to ensure that shareholders of Entertainment One Canada are provided with sufficient information in order for them to make an informed decision on any matter which they need to approve, and the directors of Entertainment One Canada will also take independent financial advice where appropriate.

Entertainment One Canada is not required, and does not intend, to appoint a listing sponsor under Chapter 8 of the Listing Rules to guide Entertainment One Canada in understanding and meeting its responsibilities under the Listing Rules.

The provisions of Chapter 9 of the Listing Rules (continuing obligations) will not apply to Entertainment One Canada. Chapter 9 includes provisions relating to transactions, including, inter alia, requirements relating to further issues of shares, the ability to issue shares at a discount in excess of 10 per cent. of market value, notifications, contents of financial information.

Although Entertainment One Canada is not required to comply with Chapter 9 of the Listing Rules, it will voluntarily:

(a) publish its preliminary statement of annual results (or the information from its annual financial report that is required to be communicated to the media pursuant to the Disclosure and Transparency Rules) through a regulatory information service as soon as possible after it has been approved and in any event within four months of the end of the period to which it relates and only after it has been agreed with Entertainment One Canada’s auditors;

(b) notify a regulatory information service as soon as possible after its directors have approved any decision to pay or make any dividend or other distribution or to withhold any dividend or interest payment; and

(c) publish its half yearly report to a regulatory information service as soon as possible after it has been approved and in any event within two months of the end of the period to which it relates. Entertainment One Canada is not required to comply with the Model Code on Directors’ dealings in shares of Entertainment One Canada set out in Chapter 9 of the Listing Rules. However,

Entertainment One Cayman adopted a code of conduct in relation to the share dealings at the time of its AIM listing, and Entertainment One Canada will continue to follow such dealing code following admission to a standard listing.

Entertainment One Canada is not required to comply with Chapters 10, 11 and 12 under the Listing Rules (significant transactions, related party transactions, dealing in own securities and treasury shares). Entertainment One Cayman does however currently comply with the requirements of the AIM Rules in relation to substantial transactions, related party transactions, reverse takeovers and fundamental change of business (AIM Rules 12 to 16) and Entertainment One Canada intends that it will continue to conduct its activities as if such requirements continued to apply to it following admission to the Official List (in so far as reasonably practicable). It should be noted that neither the UK Listing Authority nor the London Stock Exchange will have the authority to monitor Entertainment One Canada’s voluntary compliance with, nor impose sanctions in the event of a breach of, any such provisions.

Chapter 13 of the Listing Rules contains provisions relating to the content of circulars and is only applicable to companies with a “premium” listing. Consequently, Entertainment One Canada does not intend to comply with such provisions. Entertainment One Canada confirms that, notwithstanding that upon admission to the Official List neither Listing Rule 5.2.5 (cancellation of listing) nor the equivalent protection currently provided under the AIM Rules will be applicable, in the event a cancellation of its listing were to be proposed, it would in any event seek the approval of its shareholder as if Listing Rule 5.2.5 of the Listing Rules was applicable to it. Pursuant to Listing Rule 5.2.5 this will mean, inter alia, that Entertainment One Canada would send a circular to its shareholders containing certain information as specified in the Listing Rules and obtain the approval of not less than 75 per cent. of its shareholders in the event that it proposes to seek a cancellation of its listing.

It should be noted that the UK Listing Authority will not have the authority to monitor Entertainment One Canada’s voluntary compliance with any of the Listing Rules applicable to companies with a premium listing (and will not do so) nor will it impose sanctions in respect of any breach of such requirements by Entertainment One Canada.

Settlement and Dealing Arrangements Dealing Arrangements and CREST

The common shares of Entertainment One Canada are currently in registered form and in certificated form. It is proposed that, with effect from Admission, interests in Entertainment One Canada common shares may be delivered, held and settled in CREST by means of the creation of dematerialised depository interests representing such Entertainment One Canada common shares. Euroclear is unable to take responsibility for electronic settlement of shares issued by companies in certain non-UK jurisdictions.

Pursuant to a method proposed by Euroclear under which transactions in international securities may be settled through the CREST system, the Depository will issue dematerialised Depository interests representing entitlements to Entertainment One Canada common shares, known as “Depository Interests”. The Depository Interests will be independent securities constituted under Jersey law which may be held and transferred through the CREST system. Shareholders should note that it is the Depository Interests which will be admitted to and settled through CREST and not Entertainment One Canada common shares. The Articles of Incorporation of Entertainment One Canada are consistent with CREST membership in respect of Entertainment One Canada common shares, and amongst other things allow for the holding and transfer of Depository Interests in uncertificated form. Under the CBCA, companies are not prohibited from issuing shares in book-entry form but shareholders have the right to require the companies to issue physical certificates. Under the CBCA, companies are not prohibited from issuing shares in book-entry form but shareholders have the right to require the companies to issue physical certificates. The Board will pass a resolution authorising the issuance of shares in book-entry form.

The Depository Agreement under which Entertainment One Canada has appointed the Depository to provide the Depository Interest arrangements is summarised below.

The Depository Interests will be created pursuant to and issued on the terms of a deed poll executed by the Registrar in favour of the holders of the Depository Interests from time to time (the “Deed Poll”). Prospective holders of Depository Interests should note that they will have no rights in respect of the underlying Entertainment One Canada common shares or the Depository Interests representing them against Euroclear or its subsidiaries.

Entertainment One Canada common shares will be transferred to an account of the Depository or their nominated custodian (“Custodian”) and the Depository will issue Depository Interests to participating CREST members. Each Depository Interest will be treated as one Ordinary Share for the purposes of determining, for example, eligibility for any dividends. The Depository will pass on to holders of Depository Interests any stock or cash benefits received by it as holder of Entertainment One Canada common shares on trust for such Depository Interest holder. Depository Interest holders, through the Depository, will also be able to receive notices of meetings of holders of Entertainment One Canada common shares and other notices issued by Entertainment One Canada to its Shareholders.

The Depository Interests will have the same security code (ISIN) as the underlying Entertainment One Canada common shares and will not require a separate admission to the London Stock Exchange’s main market for listed securities.

Conversion into and transfers of Depository Interests are subject to stamp duty or stamp duty reserve tax, as appropriate.

CREST is a voluntary system and holders of Entertainment One Canada common shares who wish to receive and retain share certificates will be able to do so. Share certificates will be dispatched to shareholders by first-class post within 14 days of the date of Admission. No temporary certificates of title will be issued. Depository Interests – Terms of the Deed Poll

In summary, the Deed Poll contains, inter alia, provisions to the following effect:

(a) The Depository will hold (itself or through the Custodian), as bare trustee, the underlying securities issued by Entertainment One Canada and all and any rights and other securities, property and cash attributable to the underlying securities for the time being held by the Depository or Custodian pertaining to the Depository Interests for the benefit of the holders of the Depository Interests as tenants in common. The Depository will re-allocate securities or Depository Interests distributions allocated to the Depository or Custodian pro ratato the Entertainment One Canada common shares held for the respective accounts of the holders of Depository Interests but will not be required to account for fractional entitlements arising from such re-allocation.

(b) Holders of Depository Interests agree to give such warranties and certifications to the Depository as the Depository may reasonably require. In particular, holders of Depository Interests warrant, inter alia, that the securities in Entertainment One Canada transferred or issued to the Depository or Custodian on behalf of the Depository for the account of the Depository Interest holder are free and clear of all liens, charges, encumbrances or third party interests and that such transfers or issues are not in contravention of Entertainment One Canada’s constitutional documents or any contractual obligation, or applicable law or regulation binding or affecting such holder, and holders of Depository Interests agree to indemnify the Depository against any liability incurred as a result of any breach of such warranty.

(c) The Depository and any Custodian shall pass on to Depository Interest holders, and so far as reasonably able exercise on their behalf, all rights and entitlements received by the Depository or the Custodian or to which they are entitled in respect of the underlying securities which are capable of being passed or exercised. Rights and entitlements to cash Depository Interests distributions, to information, to make choices and elections and to attend and vote at meetings shall, subject to the Deed Poll, be passed on in the form which they are received, together with amendments and additional documentation necessary to effect such passing-on, or exercised in accordance with the Deed Poll. If arrangements are made which allow a holder to take up rights in Entertainment One Canada’s securities requiring further payment, the holder must put the Depository in cleared funds before the

relevant payment date or other date notified by the Depository if it wishes the Depository to exercise such rights.

(d) The Depository will be entitled to cancel Depository Interests and treat the holders as having requested a withdrawal of the underlying securities in certain circumstances including where a Depository Interest holder fails to furnish to the Depository such certificates or representations as to material matters of fact, including his identity, as the Depository deems appropriate.

(e) The Depository warrants that it is an authorised person under the FSMA and is duly authorised to carry out custodial and other activities under the Deed Poll. It also undertakes to maintain that status and authorisation.

(f) The Deed Poll contains provisions excluding and limiting the Depository’s liability. For example, the Depository shall not be liable to any Depository Interest holder or any other person for liabilities in connection with the performance or non-performance of obligations under the Deed Poll or otherwise