LIONS GATE ENTERTAINMENT CORP /CN/ (Form: 10-Q, Received: 02/09/2009)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q


(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended December 31, 2008
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

Commission File No.: 1-14880

Lions Gate Entertainment Corp.

(Exact name of registrant as specified in its charter)


British Columbia, Canada		N/A
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1055 West Hastings Street, Suite 2200
Vancouver, British Columbia V6E 2E9
and
2700 Colorado Avenue, Suite 200
Santa Monica, California 90404
(Address of principal executive offices)

(877) 848-3866

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Title of Each Class		Outstanding at February 1, 2009

Common Shares, no par value per share		115,829,621 shares

TABLE OF CONTENTS


Item			Page

		PART I — FINANCIAL INFORMATION
	1.	Financial Statements		4
	2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		36
	3.	Quantitative and Qualitative Disclosures About Market Risk		61
	4.	Controls and Procedures		62

		PART II — OTHER INFORMATION
	1.	Legal Proceedings		62
	1A.	Risk Factors		62
	2.	Unregistered Sales of Equity Securities and Use of Proceeds		64
	3.	Defaults Upon Senior Securities		64
	4.	Submission of Matters to a Vote of Security Holders		64
	5.	Other Information		65
	6.	Exhibits		65
EX-10.57
EX-10.58
EX-10.59
EX-10.60
EX-10.61
EX-10.62
EX-31.1
EX-31.2
EX-32.1

FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terms such as “may,” “intend,” “will,” “could,” “would,” “expect,” “anticipate,” “potential,” “believe,” “estimate,” or the negative of these terms, and similar expressions intended to identify forward-looking statements.

These forward-looking statements reflect Lions Gate Entertainment Corp.’s current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Also, these forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by federal securities laws, we do not intend to update you concerning any future revisions to any forward-looking statements to reflect events or circumstances occurring after the date of this report.

Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the substantial investment of capital required to produce and market films and television series, increased costs for producing and marketing feature films, budget overruns, limitations imposed by our credit facilities, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, technological changes and other trends affecting the entertainment industry, and the risk factors found herein and under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 30, 2008, which risk factors are incorporated herein by reference.

Unless otherwise indicated, all references to the “Company,” “Lionsgate,” “we,” “us,” and “our” include reference to our subsidiaries as well.

PART I — FINANCIAL INFORMATION


Item 1.	*Financial Statements.*

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


	December 31,			March 31,
	2008			2008
	(Unaudited)			(Note 1)
	(Amounts in thousands, except share amounts)


ASSETS
Cash and cash equivalents	$	130,713		$	371,589
Restricted cash		17,000			10,300
Restricted investments		7,000			6,927
Accounts receivable, net of reserve for video returns and allowances of $79,581 (March 31, 2008 — $95,515) and provision for doubtful accounts of $9,966 (March 31, 2008 — $5,978)		178,645			260,284
Investment in films and television programs		758,644			608,942
Property and equipment		16,567			13,613
Goodwill		224,213			224,531
Other assets		88,299			41,572

	$	1,421,081		$	1,537,758


LIABILITIES
Accounts payable and accrued liabilities	$	264,439		$	245,430
Participation and residuals		409,419			385,846
Film and production obligations		297,143			278,016
Subordinated notes and other financing obligations		319,718			328,718
Deferred revenue		118,843			111,510

		1,409,562			1,349,520

Commitments and contingencies

SHAREHOLDERS’ EQUITY
Common shares, no par value, 500,000,000 shares authorized, 122,798,197 and 121,081,311 shares issued at December 31, 2008 and March 31, 2008, respectively		447,965			434,650
Series B preferred shares (10 shares issued and outstanding)		—			—
Accumulated deficit		(358,039	)		(223,619	)
Accumulated other comprehensive loss		(11,179	)		(533	)

		78,747			210,498
Treasury shares, no par value, 6,999,174 and 2,410,499 shares at December 31, 2008 and March 31, 2008, respectively		(67,228	)		(22,260	)

		11,519			188,238

	$	1,421,081		$	1,537,758

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
	(Amounts in thousands, except per share amounts)

Revenues	$	324,027		$	299,008		$	1,003,204		$	849,494
Expenses:
Direct operating		218,652			140,051			566,521			411,444
Distribution and marketing		170,400			119,815			458,782			452,509
General and administration		27,472			27,506			96,380			80,717
Depreciation		1,374			954			3,616			2,900

Total expenses		417,898			288,326			1,125,299			947,570

Operating income (loss)		(93,871	)		10,682			(122,095	)		(98,076	)

Other expenses (income):
Interest expense		4,302			4,085			13,803			12,170
Interest and other income		(860	)		(2,510	)		(5,062	)		(8,948	)
Gain on sale of equity securities		—			(83	)		—			(2,868	)
Gain on extinguishment of debt		(3,549	)		—			(3,549	)		—

Total other expenses (income), net		(107	)		1,492			5,192			354

Income (loss) before equity interests and income taxes		(93,764	)		9,190			(127,287	)		(98,430	)
Equity interests loss		(1,695	)		(1,248	)		(5,841	)		(3,242	)

Income (loss) before income taxes		(95,459	)		7,942			(133,128	)		(101,672	)
Income tax provision (benefit)		(2,039	)		628			1,292			2,135

Net income (loss)	$	(93,420	)	$	7,314		$	(134,420	)	$	(103,807	)

Basic Net Income (Loss) Per Common Share	$	(0.81	)	$	0.06		$	(1.15	)	$	(0.88	)

Diluted Net Income (Loss) Per Common Share	$	(0.81	)	$	0.06		$	(1.15	)	$	(0.88	)

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


															Accumulated
					Series B							Comprehensive			Other
	Common Shares				Preferred Shares				Accumulated			Income			Comprehensive			Treasury Shares
	Number		Amount		Number		Amount		Deficit			(Loss)			Income (Loss)			Number			Amount			Total
							(Amounts in thousands, except share amounts)

Balance at March 31, 2008		121,081,311	$	434,650		10	$	—	$	(223,619	)				$	(533	)		(2,410,499	)	$	(22,260	)	$	188,238
Exercise of stock options, net of withholding tax obligations of $1,182		875,168		1,712																					1,712
Stock based compensation, net of withholding tax obligations of $1,952		628,779		9,629																					9,629
Issuance of common shares to directors for services		43,060		408																					408
Issuance of common shares related to the Mandate acquisition		169,879		1,566																					1,566
Repurchase of common shares, no par value																			(4,588,675	)		(44,968	)		(44,968	)
Comprehensive loss
Net loss										(134,420	)	$	(134,420	)											(134,420	)
Foreign currency translation adjustments													(10,834	)		(10,834	)								(10,834	)
Net unrealized gain on foreign exchange contracts													115			115									115
Unrealized gain on investments — available for sale													73			73									73

Comprehensive loss												$	(145,066	)

Balance at December 31, 2008		122,798,197	$	447,965		10	$	—	$	(358,039	)				$	(11,179	)		(6,999,174	)	$	(67,228	)	$	11,519

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months			Nine Months
	Ended			Ended
	December 31,			December 31,
	2008			2007
	(Amounts in thousands)

Operating Activities:
Net loss	$	(134,420	)	$	(103,807	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		3,616			2,900
Amortization of deferred financing costs		3,397			2,659
Amortization of films and television programs		315,614			255,157
Amortization of intangible assets		760			698
Non-cash stock-based compensation		12,027			10,207
Gain on sale of equity securities		—			(2,794	)
Gain on extinguishment of debt		(3,549	)		—
Equity interests loss		5,841			3,242
Changes in operating assets and liabilities:
Restricted cash		(6,700	)		(19,674	)
Accounts receivable, net		72,945			(38,620	)
Investment in films and television programs		(471,308	)		(397,773	)
Other assets		(12,191	)		(5,903	)
Accounts payable and accrued liabilities		26,826			39,859
Participation and residuals		24,696			112,644
Film obligations		58,711			10,810
Deferred revenue		7,826			39,182

Net Cash Flows Used In Operating Activities		(95,909	)		(91,213	)

Investing Activities:
Purchases of investments — auction rate securities		—			(207,262	)
Proceeds from the sale of investments — auction rate securities		—			444,641
Purchases of investments — equity securities		—			(4,765	)
Proceeds from the sale of investments — equity securities		—			24,035
Acquisition of Mandate Pictures, net of unrestricted cash acquired		—			(41,205	)
Acquisition of Maple Pictures, net of unrestricted cash acquired		—			1,737
Investment in equity method investees		(15,886	)		(6,464	)
Increase in loan receivables		(28,767	)		(5,895	)
Purchases of property and equipment		(6,465	)		(2,742	)

Net Cash Flows Provided By (Used In) Investing Activities		(51,118	)		202,080

Financing Activities:
Exercise of stock options		2,894			864
Tax withholding requirements on equity awards		(3,134	)		(4,723	)
Repurchases of common shares		(44,968	)		(20,337	)
Borrowings under financing arrangements		—			3,718
Increase in production obligations		126,420			131,318
Repayment of production obligations		(165,298	)		(91,339	)
Repayment of subordinated notes		(5,310	)		—

Net Cash Flows Provided By (Used In) Financing Activities		(89,396	)		19,501

Net Change In Cash And Cash Equivalents		(236,423	)		130,368
Foreign Exchange Effects on Cash		(4,453	)		1,690
Cash and Cash Equivalents — Beginning Of Period		371,589			51,497

Cash and Cash Equivalents — End Of Period	$	130,713		$	183,555

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.	General

Nature of Operations

Lions Gate Entertainment Corp. (the “Company,” “Lionsgate,” “we,” “us” or “our”) is a filmed entertainment studio with a diversified presence in the production and distribution of motion pictures, television programming, home entertainment, family entertainment, video-on-demand and digitally delivered content.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Lionsgate and its wholly owned and controlled subsidiaries.

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Article 10 of Regulation S-X under the Exchange Act. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these unaudited condensed consolidated financial statements. Operating results for the three and nine months ended December 31, 2008 are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2009. The balance sheet at March 31, 2008 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read together with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2008.

Certain amounts presented for fiscal 2008 have been reclassified to conform to the fiscal 2009 presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates made by the Company’s management in the preparation of the financial statements relate to: ultimate revenue and costs for investment in films and television programs; estimates of sales returns, provision for doubtful accounts, fair value of assets and liabilities for allocation of the purchase price of companies acquired, income taxes and accruals for contingent liabilities; and impairment assessments for investment in films and television programs, property and equipment, goodwill and intangible assets. Actual results could differ from such estimates.

Recent Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (the “FASB”) issued FASB Staff Position (“FSP”) APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”). FSP APB 14-1 clarifies that convertible debt instruments that may be settled in cash upon either mandatory or optional conversion (including partial cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14, Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants . FSP APB 14-1 provides that issuers of such instruments should separately account for the liability and equity components of those instruments by allocating the proceeds at the date of issuance of the instrument between the liability component and the embedded conversion option (the equity component). The equity component is recorded in equity and the reduction in the principal amount (debt discount) is amortized as interest expense over the expected life of the instrument using the interest method. FSP APB 14-1 is effective for financial statements

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. We will adopt FSP APB 14-1 beginning in the first quarter of fiscal 2010, and this standard must be applied on a retrospective basis. We are evaluating the impact that the adoption of FSP APB 14-1 will have on our consolidated financial position and results of operations.

In December 2007, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). SFAS No. 141(R) significantly changes the accounting for business combinations in a number of areas including the treatment of contingent consideration, preacquisition contingencies, transaction costs, in-process research and development and restructuring costs. In addition, under SFAS No. 141(R), changes in an acquired entity’s deferred tax assets and uncertain tax positions after the measurement period will impact income tax expense. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008. We will adopt SFAS No. 141(R) beginning in the first quarter of fiscal 2010, which will change our accounting treatment for business combinations on a prospective basis.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS No. 160”). SFAS No. 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. This new consolidation method significantly changes the accounting for transactions with minority interest holders. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. We will adopt SFAS No. 160 beginning in the first quarter of fiscal 2010. We are evaluating the impact that the adoption of SFAS No. 160 will have on our consolidated financial position and results of operations.


2.	Restricted Cash and Restricted Investments

Restricted Cash. Restricted cash represents amounts on deposit with financial institutions that are contractually designated for certain theatrical marketing obligations and collateral required under a revolving credit facility.

Restricted Investments. Restricted investments represent amounts held in investments that are contractually designated for certain production obligations. At December 31, 2008, the Company held $7.0 million of restricted investments in United States Treasury Bills bearing an interest rate of 0.02%, maturing March 5, 2009. These investments are held as collateral for a production obligation pursuant to an escrow agreement.

At March 31, 2008, the Company held $7.0 million of a triple A rated taxable Student Auction Rate Security (“ARS”), at par value, issued by the Panhandle-Plains Higher Education Authority. These ARS were sold back to the issuer at par value resulting in no gain or loss.

Restricted investments as of December 31, 2008 and March 31, 2008 are set forth below:


	December 31, 2008
			Unrealized		Fair
	Cost		Gains (Losses)		Value
	(Amounts in thousands)

United States Treasury Bills	$	7,000	$	—	$	7,000


	March 31, 2008
			Unrealized			Fair
	Cost		Gains (Losses)			Value
	(Amounts in thousands)

Auction rate — student loans	$	7,000	$	(73	)	$	6,927

Interest and dividend income earned on restricted investments during the three and nine months ended December 31, 2008 were $0.1 million and $0.2 million, respectively. Interest and dividend income earned on

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

restricted and other available-for-sale investments outstanding during the three and nine months ended December 31, 2007 were $2.0 million and $6.6 million, respectively.


3.	Investment in Films and Television Programs


	December 31,		March 31,
	2008		2008
	(Amounts in thousands)

Motion Picture Segment — Theatrical and Non-Theatrical Films
Released, net of accumulated amortization	$	303,841	$	218,898
Acquired libraries, net of accumulated amortization		65,701		80,674
Completed and not released		75,223		13,187
In progress		149,586		188,108
In development		8,761		6,513
Product inventory		50,227		33,147

		653,339		540,527

Television Segment — Direct-to-Television Programs
Released, net of accumulated amortization		80,133		55,196
In progress		23,714		12,608
In development		1,458		611

		105,305		68,415

	$	758,644	$	608,942

The following table sets forth acquired libraries that represent titles released three years prior to the date of acquisition, and amortized over their expected revenue stream from acquisition date up to 20 years:


		Total		Remaining		Unamortized Costs		Unamortized Costs
		Amortization		Amortization		December 31,		March 31,
Acquired Library	Acquisition Date	Period		Period		2008		2008
		(In years)				(Amounts in thousands)

Trimark	October 2000		20.00		11.75	$	11,013	$	12,318
Artisan	December 2003		20.00		15.00		51,088		58,533
Modern	August 2005		20.00		16.50		2,659		3,953
Lionsgate UK	October 2005		20.00		16.75		941		1,827
Mandate	September 2007		3.00		—		—		4,043

Total Acquired Libraries						$	65,701	$	80,674

The Company expects approximately 48% of completed films and television programs, net of accumulated amortization, will be amortized during the one-year period ending December 31, 2009. Additionally, the Company expects approximately 80% of completed and released films and television programs, net of accumulated amortization and excluding acquired libraries, will be amortized during the three-year period ending December 31, 2011.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


4.	Goodwill

The changes in the carrying amount of goodwill by reporting segment in the nine months ended December 31, 2008 were as follows:


	Motion
	Pictures			Television		Total
	(Amounts in thousands)

Balance as of March 31, 2008	$	210,570		$	13,961	$	224,531
Mandate Pictures, LLC		(318	)		—		(318	)

Balance as of December 31, 2008	$	210,252		$	13,961	$	224,213

During the nine months ended December 31, 2008, goodwill decreased by $0.3 million due to changes in the estimated fair value of the assets acquired and liabilities assumed from the acquisition of Mandate Pictures, LLC.


5.	Other Assets


	December 31,		March 31,
	2008		2008
	(Amounts in thousands)

Deferred financing costs, net of accumulated amortization	$	13,018	$	7,200
Prepaid expenses and other		7,949		5,239
Loan receivables		32,587		3,382
Intangible assets		1,395		2,317
Equity method investments		33,350		23,434

	$	88,299	$	41,572

Deferred Financing Costs

Deferred financing costs primarily include costs incurred in connection with an amended credit facility (see Note 6) executed in July 2008 and the issuance of the 2.9375% Notes (as hereafter defined) and the 3.625% Notes (as hereafter defined) (see Note 8) that are deferred and amortized to interest expense. In December 2008, the Company repurchased $9.0 million of the 3.625% Notes for $5.3 million plus $0.1 million in accrued interest, resulting in a gain of $3.5 million. As a result of this repurchase, the Company wrote off an additional $0.1 million of deferred financing costs associated with the 3.625% Notes.

Loan Receivables

Loan receivables at December 31, 2008 consist of a $25.0 million collateralized note receivable plus $0.6 million of accrued interest from a third party producer, and a $6.8 million note receivable and $0.2 million of accrued interest from NextPoint, Inc. (“Break.com”), an equity method investee, as described below. At March 31, 2008, loan receivables consisted of note receivables, including accrued interest, of $3.4 million from Break.com.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Intangible Assets

Intangible assets consist primarily of trademarks and distribution agreements. The composition of the Company’s acquired intangible assets and the associated accumulated amortization is as follows as of December 31, 2008 and March 31, 2008:


	Weighted
	Average		December 31, 2008						March 31, 2008
	Remaining		Gross				Net		Gross				Net
	Life in		Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Years		Amount		Amortization		Amount		Amount		Amortization		Amount
			(Amounts in thousands)

Intangible assets:
Trademarks		4	$	1,600	$	450	$	1,150	$	1,625	$	200	$	1,425
Distribution agreements		2		922		677		245		1,273		454		819
Music license		—		1,304		1,304		—		1,304		1,231		73

Total intangible assets			$	3,826	$	2,431	$	1,395	$	4,202	$	1,885	$	2,317

The aggregate amount of amortization expense associated with the Company’s intangible assets for the three- and nine-month periods ending December 31, 2008 was approximately $0.2 million and $0.8 million, respectively. Estimated amortization expense for each of the years ending March 31, 2009 through 2014 is approximately $0.2 million, $0.5 million, $0.3 million, $0.3 million, $0.1 million and nil, respectively.

Equity Method Investments

The carrying amount of significant equity method investments at December 31, 2008 and March 31, 2008 were as follows:


	December 31,		March 31,
	2008		2008
	(Amounts in thousands)

Horror Entertainment, LLC (“FEARnet”)	$	2,386	$	789
NextPoint, Inc. (“Break.com”)		18,725		19,979
Roadside Attractions, LLC		1,957		2,201
Studio 3 Partners, LLC (“EPIX”)		9,946		—
Elevation Sales Limited		336		465

	$	33,350	$	23,434

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Equity interests in equity method investments in our unaudited condensed consolidated statements of operations represent our portion of the income or loss of our equity method investees based on our percentage ownership. Equity losses in equity method investments for the three and nine months ended December 31, 2008 and 2007 were as follows:


	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
	(Amounts in thousands)

Maple Pictures Corp.	$	—		$	—		$	—		$	(71	)
Horror Entertainment, LLC (“FEARnet”)		(1,373	)		(1,281	)		(3,783	)		(3,199	)
NextPoint, Inc. (“Break.com”)		(208	)		21			(1,354	)		16
Roadside Attractions, LLC		134			(16	)		(244	)		(16	)
Studio 3 Partners, LLC (“EPIX”)		(248	)		—			(460	)		—
Elevation Sales Limited		—			28			—			28

	$	(1,695	)	$	(1,248	)	$	(5,841	)	$	(3,242	)

Maple Pictures Corp. Represents the Company’s interest in Maple Pictures Corp. (“Maple Pictures”), a motion picture, television and home entertainment distributor in Canada. Maple Pictures was formed by a director of the Company, a former Lionsgate executive and a third-party equity investor. Through July 17, 2007, the Company owned 10% of the common shares of Maple Pictures and accounted for its investment in Maple Pictures under the equity method of accounting. Accordingly, during the nine months ended December 31, 2007, the Company recorded 10% of the loss incurred by Maple Pictures through July 17, 2007. On July 18, 2007, Maple Pictures repurchased all of the outstanding shares held by a third party investor, which increased the Company’s ownership of Maple Pictures, requiring the Company to consolidate Maple Pictures for financial reporting purposes beginning on July 18, 2007. Accordingly, the results of operations of Maple Pictures are reflected in the Company’s consolidated results since July 18, 2007.

Horror Entertainment, LLC. Represents the Company’s 33.33% interest in Horror Entertainment, LLC (“FEARnet”), a multiplatform programming and content service provider of horror genre films operating under the branding of “FEARnet”. The Company entered into a five-year license agreement with FEARnet for U.S. territories and possessions whereby the Company will license content to FEARnet for video-on-demand and broadband exhibition. The Company made capital contributions to FEARnet of $5.0 million in October 2006, $2.6 million in July 2007, $2.5 million in April 2008, and $2.9 million in October 2008. As of December 31, 2008, the Company has a remaining commitment for additional capital contributions totaling $0.3 million, which is expected to be funded by March 31, 2009. Under certain circumstances, if the Company defaults on any of its funding obligations, the Company could forfeit its equity interest in FEARnet and its license agreement with FEARnet could be terminated. The Company is recording its share of the FEARnet results on a one quarter lag and, accordingly, during the nine months ended December 31, 2008, the Company recorded 33.33% of the loss incurred by FEARnet through September 30, 2008.

NextPoint, Inc. Represents the Company’s 42% equity interest or 21,000,000 share ownership of the Series B Preferred Stock of NextPoint, Inc. (“Break.com”), an online home entertainment service provider operating under the branding of “Break.com”. The interest was acquired on June 29, 2007 for an aggregate purchase price of $21.4 million which included $0.5 million of transaction costs, by issuing 1,890,189 of the Company’s common shares. The value assigned to the shares for purposes of recording the investment of $20.9 million was based on the average price of the Company’s common shares a few days prior and subsequent to the date of the closing of the acquisition. The Company has a call option which is exercisable at any time from June 29, 2007 until the earlier of (i) 30 months after June 29, 2007 or (ii) one year after a change of control, as narrowly defined, to purchase all of the

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

remaining 58% equity interests (excluding any subsequent dilutive events) of Break.com, including in-the-money stock options, warrants and other rights of Break.com for $58.0 million in cash or common stock, at the Company’s option. The estimated initial cost of the call option was $1.2 million and is included within the investment balance. This call option is accounted for at cost and is evaluated for other than temporary impairment each reporting period. The Company is recording its share of the Break.com results on a one quarter lag and, accordingly, during the nine months ended December 31, 2008, the Company recorded 42% of the loss incurred by Break.com through September 30, 2008.

Roadside Attractions, LLC. Represents the Company’s 43% equity interest acquired on July 26, 2007 in Roadside Attractions, LLC (“Roadside”), an independent theatrical releasing company. The Company has a call option which is exercisable for a period of 90 days commencing on the receipt of certain audited financial statements for the three years ended July 26, 2010, to purchase all of the remaining 57% equity interests of Roadside, at a price representative of the then fair value of the remaining interest. The estimated initial cost of the call option is de minimus since the option price is designed to be representative of the then fair value and is included within the investment balance. The Company is recording its share of the Roadside results on a one quarter lag and, accordingly, during the nine months ended December 31, 2008, the Company recorded 43% of the loss incurred by Roadside through September 30, 2008.

Elevation Sales Limited. Represents the Company’s 50% equity interest in Elevation Sales Limited (“Elevation”), a UK based home entertainment distributor. At December 31, 2008, the Company was owed $12.7 million in account receivables from Elevation (March 31, 2008 — $29.0 million). The amounts receivable from Elevation represent amounts due to our wholly-owned subsidiary, Lions Gate UK Limited (“Lionsgate UK”), located in the United Kingdom, for accounts receivable arising from the sale and rental of DVD products. The credit period extended to Elevation is 60 days.

Studio 3 Partners, LLC (“EPIX”). In April 2008, the Company formed a joint venture with Viacom Inc. (“Viacom”), its Paramount Pictures unit (“Paramount Pictures”) and Metro-Goldwyn-Mayer Studios Inc. (“MGM”) to create a premium television channel and subscription video-on-demand service named “EPIX”. The new venture will have access to the Company’s titles released theatrically on or after January 1, 2009. Viacom will provide operational support to the venture, including marketing and affiliate services through its MTV Networks division. Upon its expected launch in the fall of 2009, the joint venture will provide the Company with an additional platform to distribute its library of motion picture titles and television episodes and programs. Currently, the Company has invested $10.3 million as of December 31, 2008, which represents 28.57% or its proportionate share of investment in the joint venture. The Company has a mandatory commitment of $31.4 million increasing to $42.9 million if certain performance targets are achieved. The Company is recording its share of the joint venture results on a one quarter lag and, accordingly, during the nine months ended December 31, 2008, the Company recorded 28.57% of the loss incurred by the joint venture through September 30, 2008.


6.	Bank Loans

In July 2008, the Company entered into an amended credit facility which provides for a $340 million secured revolving credit facility, of which $30 million may be utilized by two of the Company’s wholly owned foreign subsidiaries. The amended credit facility expires July 25, 2013 and bears interest at 2.25% over the “Adjusted LIBOR” rate. At December 31, 2008, the Company had no borrowings (March 31, 2008 — nil) under the credit facility. The availability of funds under the credit facility is limited by a borrowing base and also reduced by outstanding letters of credit, which amounted to $22.7 million at December 31, 2008. At December 31, 2008, there was $317.3 million available under the amended credit facility. The Company is required to pay a monthly commitment fee based upon 0.50% per annum on the total credit facility of $340 million less the amount drawn. This amended credit facility amends and restates the Company’s original $215 million credit facility. Obligations under the credit facility are secured by collateral (as defined in the credit agreement) granted by the Company and certain subsidiaries of the Company, as well as a pledge of equity interests in certain of the Company’s subsidiaries.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The amended credit facility contains a number of affirmative and negative covenants that, among other things, require the Company to satisfy certain financial covenants and restrict the ability of the Company to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, enter into sale-leaseback transactions, transfer and sell material assets and merge or consolidate.


7.	Film and Production Obligations and Participation and Residuals


	December 31,			March 31,
	2008			2008
	(Amounts in thousands)

Film obligations(1)	$	88,124		$	29,905
Production obligations(2)		209,019			248,111

Total film and production obligations		297,143			278,016
Less film and production obligations expected to be paid within one year		(120,607	)		(193,699	)

Film and production obligations expected to be paid after one year	$	176,536		$	84,317

Participation and residuals	$	409,419		$	385,846


(1)		Film obligations include minimum guarantees, which represent amounts payable for film rights that the Company has acquired and theatrical marketing obligations, which represent amounts that are contractually committed for theatrical marketing expenditures associated with specific films.

(2)		Production obligations represent amounts payable for the cost incurred for the production of film and television programs that the Company produces which, in some cases, are financed over periods exceeding one year. Production obligations have contractual repayment dates either at or near the expected completion date, with the exception of certain obligations containing repayment dates on a longer term basis. Production obligations of $116.6 million incur interest at rates ranging from 1.94% to 4.25%, and approximately $83.7 million of production obligations are non-interest bearing. Also included in production obligations is $8.8 million in long term production obligations with an interest rate of 2.5% that is part of a $66.0 million funding agreement with the State of Pennsylvania, as more fully described below.

		On April 9, 2008, the Company entered into a loan agreement with the Pennsylvania Regional Center, which provides for the availability of production loans up to $66,000,000 on a five year term for use in film and television productions in the State of Pennsylvania. The amount that can be borrowed is generally limited to approximately one half of the qualified production costs incurred in the State of Pennsylvania through the two year period ended April 2010, and is subject to certain other limitations. Under the terms of the loan, for every dollar borrowed, the Company’s production companies are required (within a two year period) to either create a specified number of jobs, or spend a specified amount in certain geographic regions in the State of Pennsylvania. Amounts borrowed under the agreement carry an interest rate of 2.5%, which is payable semi-annually, and the principal amount is due on the five-year anniversary date of the first borrowing under the agreement (i.e., April 2013). The loan is secured by a first priority security interest in the Company’s film library pursuant to an intercreditor agreement with the Company’s senior lender under the Company’s revolving credit facility. Pursuant to the terms of the Company’s credit facility, the Company is required to maintain a balance equal to the loans outstanding plus 5% under this facility in a bank account with the Company’s senior lender under the Company’s credit facility. Accordingly, included in restricted cash is $9.2 million (on deposit with our senior lenders), related to amounts received under the Pennsylvania agreement.

The Company expects approximately 73% of accrued participations and residuals will be paid during the one-year period ending December 31, 2009.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Theatrical Slate Participation

On May 25, 2007, the Company closed a theatrical slate participation arrangement, as amended on January 30, 2008. Under this arrangement, Pride Pictures, LLC (“Pride”), an unrelated entity, would participate in, generally, 50% of the Company’s production, acquisition, marketing and distribution costs of theatrical feature films up to an aggregate of approximately $196 million, net of transaction costs. The funds available from Pride were generated from the issuance by Pride of $35 million of subordinated debt instruments, $35 million of equity and $134 million from a senior revolving credit facility, which is subject to a borrowing base. The borrowing base calculation is generally based on 90% of the estimated ultimate amounts due to Pride on previously released films, as defined in the applicable agreements. The Company is not a party to the Pride debt obligations or their senior credit facility, and provides no guarantee of repayment of these obligations. The percentage of the contribution could vary on certain pictures. Pride participated in a pro rata portion of the pictures’ net profits or losses similar to a co-production arrangement based on the portion of costs funded. The Company continues to distribute the pictures covered by the arrangement with a portion of net profits after all costs and the Company’s distribution fee being distributed to Pride based on their pro rata contribution to the applicable costs similar to a back-end participation on a film.

Amounts provided from Pride are reflected as a participation liability. The difference between the ultimate participation expected to be paid to Pride and the amount provided by Pride is amortized as a charge to or a reduction of participation expense under the individual film forecast method. At December 31, 2008, $123.5 million (March 31, 2008, $134.3 million) was payable to Pride and is included in the participation liability in the unaudited condensed consolidated balance sheet. The administrative agent for the senior lenders under Pride’s senior credit facility has taken the position that the senior lenders no longer have an obligation to continue to fund under the senior credit facility because the conditions precedent to funding set forth in the senior credit facility cannot be satisfied. The representative for the Pride equity and the Pride mezzanine investors have not yet taken a position as to the validity of the administrative agent’s assertion, and until this is resolved, all parties have reserved their respective rights. As a consequence, Pride did not purchase the pictures The Spirit or My Bloody Valentine 3-D and it is unknown whether Pride will purchase any additional pictures.

Société Générale de Financement du Québec Filmed Entertainment Participation

On July 30, 2007, the Company entered into a four-year filmed entertainment slate participation agreement with Société Générale de Financement du Québec (“SGF”), the Québec provincial government’s investment arm. SGF will provide up to 35% of production costs of television and feature film productions produced in Québec for a four-year period for an aggregate participation of up to $140 million, and the Company will advance all amounts necessary to fund the remaining budgeted costs. The maximum aggregate of budgeted costs over the four-year period will be $400 million, including the Company’s portion, but no more than $100 million per year. In connection with this agreement, the Company and SGF will proportionally share in the proceeds derived from the productions after the Company deducts a distribution fee, recoups all distribution expenses and releasing costs, and pays all applicable third party participations and residuals.

Amounts provided from SGF are reflected as a participation liability. The difference between the ultimate participation expected to be paid to SGF and the amount provided by SGF is amortized as a charge to or a reduction of participation expense under the individual film forecast method. At December 31, 2008, $6.1 million (March 31, 2008, $9.3 million) was payable to SGF and is included in the participation liability in the unaudited condensed consolidated balance sheet, and $124.5 million was available to be provided by SGF under the terms of the arrangement.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


8.	Subordinated Notes and Other Financing Obligations

The following table sets forth the subordinated notes and other financing obligations outstanding at December 31, 2008 and March 31, 2008:


	December 31,		March 31,
	2008		2008
	(Amounts in thousands)

2.9375% Convertible Senior Subordinated Notes	$	150,000	$	150,000
3.625% Convertible Senior Subordinated Notes		166,000		175,000
Other Financing Obligations		3,718		3,718

	$	319,718	$	328,718

Subordinated Notes

3.625% Notes. In February 2005, Lions Gate Entertainment Inc. (“LGEI”), a wholly-owned subsidiary of the Company, sold $175.0 million of 3.625% Convertible Senior Subordinated Notes (the “3.625% Notes”). The Company received $170.2 million of net proceeds after paying placement agents’ fees from the sale of the 3.625% Notes. The Company also paid $0.6 million of offering expenses incurred in connection with the sale of the 3.625% Notes. Interest on the 3.625% Notes is payable semi-annually on March 15 and September 15, from September 15, 2005 until March 15, 2012. After March 15, 2012, interest will be 3.125% per annum on the principal amount of the 3.625% Notes, payable semi-annually on March 15 and September 15 of each year until maturity on March 15, 2025. LGEI may redeem all or a portion of the 3.625% Notes at its option on or after March 15, 2012 at 100% of their principal amount, together with accrued and unpaid interest through the date of redemption.

The holder may require LGEI to repurchase the 3.625% Notes on March 15, 2012, 2015 and 2020 or upon a change in control at a price equal to 100% of the principal amount, together with accrued and unpaid interest through the date of repurchase. Under certain circumstances, if the holder requires LGEI to repurchase all or a portion of their notes upon a change in control, they will be entitled to receive a make whole premium. The amount of the make whole premium, if any, will be based on the price of the Company’s common shares on the effective date of the change in control. No make whole premium will be paid if the price of the Company’s common shares at such time is less than $10.35 per share or exceeds $75.00 per share.

The 3.625% Notes are convertible, at the option of the holder, at any time before the close of business on or prior to the trading day immediately before the maturity date, if the notes have not been previously redeemed or repurchased, at a conversion rate equal to 70.0133 shares per $1,000 principal amount of the 3.625% Notes, subject to adjustment in certain circumstances, which is equal to a conversion price of approximately $14.28 per share. Upon conversion of the 3.625% Notes, the Company has the option to deliver, in lieu of common shares, cash or a combination of cash and common shares of the Company. The holder may convert the 3.625% Notes into the Company’s common shares prior to maturity if the notes have been called for redemption, a change in control occurs or certain other corporate transactions occur.

In December 2008, the Company repurchased $9.0 million of the 3.625% Notes for $5.3 million plus $0.1 million in accrued interest, resulting in a gain of $3.5 million. As a result of this repurchase, the Company wrote off an additional $0.1 million of deferred financing costs associated with the 3.625% Notes.

2.9375% Notes. In October 2004, LGEI sold $150.0 million of 2.9375% Convertible Senior Subordinated Notes (the “2.9375% Notes”). The Company received $146.0 million of net proceeds after paying placement agents’ fees from the sale of $150.0 million of the 2.9375% Notes. The Company also paid $0.7 million of offering expenses incurred in connection with the sale of the 2.9375% Notes. Interest on the 2.9375% Notes is payable semi-annually on April 15 and October 15, which commenced on April 15, 2005, and the 2.9375% Notes mature on October 15, 2024. From October 15, 2009 to October 14, 2010, LGEI may redeem the 2.9375% Notes at 100.839%;

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

from October 15, 2010 to October 14, 2011, LGEI may redeem the 2.9375% Notes at 100.420%; and thereafter, LGEI may redeem the notes at 100%.

The holder may require LGEI to repurchase the 2.9375% Notes on October 15, 2011, 2014 and 2019 or upon a change in control at a price equal to 100% of the principal amount, together with accrued and unpaid interest through the date of repurchase. Under certain circumstances, if the holder requires LGEI to repurchase all or a portion of their notes upon a change in control, they will be entitled to receive a make whole premium. The amount of the make whole premium, if any, will be based on the price of the Company’s common shares on the effective date of the change in control. No make whole premium will be paid if the price of the Company’s common shares at such time is less than $8.79 per share or exceeds $50.00 per share.

The holder may convert the 2.9375% Notes into the Company’s common shares prior to maturity only if the price of the Company’s common shares issuable upon conversion of a note reaches a specified threshold over a specified period, the trading price of the notes falls below certain thresholds, the notes have been called for redemption, a change in control occurs or certain other corporate transactions occur. Upon conversion of the 2.9375% Notes, the Company has the option to deliver, in lieu of common shares, cash or a combination of cash and common shares of the Company. In addition, under certain circumstances, if the holder converts their notes upon a change in control, they will be entitled to receive a make whole premium. Before the close of business on or prior to the trading day immediately before the maturity date, if the notes have not been previously redeemed or repurchased, the holder may convert the notes into the Company’s common shares at a conversion rate equal to 86.9565 shares per $1,000 principal amount of the 2.9375% Notes, subject to adjustment in certain circumstances, which is equal to a conversion price of approximately $11.50 per share.

Other Financing Obligations

On June 1, 2007, the Company entered into a bank financing agreement for $3.7 million to fund the acquisition of certain capital assets. Interest is payable in monthly payments totaling $0.3 million per year for five years at an interest rate of 8.02%, with the entire principal due June 2012.


9.	Acquisitions

Acquisition of Mandate Pictures, LLC

On September 10, 2007, the Company purchased all of the membership interests in Mandate Pictures, LLC, a Delaware limited liability company (“Mandate Pictures”). Mandate Pictures is a worldwide independent film producer and distributor. The Mandate Pictures acquisition brought the Company additional experienced management personnel working within the motion picture business segment. In addition, the Mandate Pictures acquisition added an independent film and distribution business to the Company’s motion picture business. The aggregate cost of the acquisition was approximately $128.8 million including liabilities assumed of $70.2 million, with amounts paid or to be paid to the selling shareholders of approximately $58.6 million, comprised of $46.8 million in cash and 1,282,999 of the Company’s common shares, 169,879 of which were issued during the quarter ended March 31, 2008, another 169,879 which were issued during the quarter ended September 30, 2008 and the balance of 943,241 to be issued and delivered in March 2009, pursuant to certain holdback provisions. Of the $46.8 million cash portion of the purchase price, $44.3 million was paid at closing, $0.9 million represented estimated direct transaction costs (paid to lawyers, accountants and other consultants), and $1.6 million represented the remaining cash consideration paid during the quarter ended June 30, 2008. In addition, immediately prior to the transaction, the Company loaned Mandate Pictures $2.9 million. The value assigned to the shares for purposes of recording the acquisition was $11.8 million and was based on the average price of the Company’s common shares a few days prior and subsequent to the date of the closing of the acquisition, which is when it was publicly announced.

In addition, the Company may be obligated to pay additional amounts pursuant to the purchase agreement should certain films or derivative works meet certain target performance thresholds. Such amounts, to the extent

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

they relate to films or derivative works of films identified at the acquisition date will be charged to goodwill if the target thresholds are achieved, and such amounts, to the extent they relate to other qualifying films produced in the future, will be accounted for similar to other film participation arrangements. The amount to be paid is the excess of the sum of the following amounts over the performance threshold (i.e. the “Hurdle Amount”):


	•	80% of the earnings of certain films for the longer of five years from the closing or five years from the release of the pictures, plus

	•	20% of the earnings of certain pictures which commence principal photography within five years from the closing date for a period up to ten years, plus

	•	certain fees designated for derivative works which commence principal photography within seven years of the initial release of the original picture.

The Hurdle Amount is the purchase price of approximately $56 million plus an interest cost accruing until such hurdle is reached, and certain other costs the Company agreed to pay in connection with the acquisition. Accordingly, the additional consideration is the total of the above in excess of the Hurdle Amount. As of December 31, 2008, the total earnings and fees from identified projects in process are not projected to reach the Hurdle Amount. However, as additional projects are identified in the future and current projects are released in the market place, the total projected earnings and fees from these projects could increase causing additional payments to the sellers to become payable.

The acquisition was accounted for as a purchase, with the results of operations of Mandate Pictures included in the Company’s consolidated results from September 10, 2007. Goodwill of $36.8 million resulted from the excess of purchase price over the estimate of the fair value of the net identifiable tangible and intangible assets acquired. The $36.8 million of goodwill was assigned to the motion pictures reporting segment. Although the goodwill will not be amortized for financial reporting purposes, it is anticipated that substantially all of the goodwill will be deductible for federal tax purposes over the statutory period of 15 years.

Acquisition of Debmar-Mercury LLC

On July 3, 2006, the Company acquired all of the capital stock of Debmar-Mercury, LLC (“Debmar-Mercury”), a leading syndicator of film and television packages. Consideration for the Debmar-Mercury acquisition was $27.0 million, comprised of a combination of $24.5 million in cash paid on July 3, 2006 and $2.5 million in common shares of the Company issued in January 2008, and assumed liabilities of $10.5 million. Goodwill of $8.7 million resulted from the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired.

Pursuant to the purchase agreement, if the aggregate earnings before interest, taxes, depreciation and amortization adjusted to add back 20% of the overhead expense (“Adjusted EBITDA”) of Debmar-Mercury for the five year period ending after the closing date exceeds the target amount, then up to 40% of the excess Adjusted EBITDA over the target amount is payable as additional consideration. The percentage payable of the excess Adjusted EBITDA over the target amount ranges from 20% of such excess up to an excess of $3 million, 25% of such excess over $3 million and less than $6 million, 30% of such excess over $6 million and less than $10 million and 40% of such excess over $10 million. The target amount is $32.2 million plus adjustments for interest on certain funding provided by the Company and adjustments for certain overhead and other items. If the Adjusted EBITDA of Debmar-Mercury is proportionately on track to exceed the target amount after three years from the date of closing, the Company will pay a recoupable advance against the five-year payment.

In addition, up to 40% (percentage is determined based on how much the cumulative Adjusted EBITDA exceeds the target amount) of Adjusted EBITDA of Debmar-Mercury generated subsequent to the five-year period from the assets existing as of the fifth anniversary date of the close is also payable as additional consideration on a quarterly basis (the “Continuing Earnout Payment”), unless the substitute earnout option is exercised by either the

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

seller or the Company. The substitute earnout option is only available if the aggregate Adjusted EBITDA for the five year period ending after the closing date exceeds the target amount. Under the substitute earnout option, the seller can elect to receive an amount equal to $2.5 million in lieu of the Continuing Earnout Payments and the Company can elect to pay an amount equal to $15 million in lieu of the Continuing Earnout Payments.

Amounts paid, if any, under the above additional consideration provisions will be recorded as additional goodwill.


10.	Direct Operating Expenses


	Three Months		Three Months			Nine Months		Nine Months
	Ended		Ended			Ended		Ended
	December 31,		December 31,			December 31,		December 31,
	2008		2007			2008		2007
	(Amounts in thousands)

Amortization of films and television programs	$	128,871	$	78,263		$	315,614	$	255,157
Participation and residual expense		86,728		61,460			245,735		156,011
Amortization of acquired intangible assets		201		373			760		698
Other expenses		2,852		(45	)		4,412		(422	)

	$	218,652	$	140,051		$	566,521	$	411,444

Other expenses consist of the provision (benefit) for doubtful accounts and foreign exchange gains and losses for the three and nine months ended December 31, 2008 and 2007, and were as follows:


	Three Months		Three Months			Nine Months		Nine Months
	Ended		Ended			Ended		Ended
	December 31,		December 31,			December 31,		December 31,
	2008		2007			2008		2007
	(Amounts in thousands)

Other expenses:
Provision (benefit) for doubtful accounts	$	1,591	$	(39	)	$	1,813	$	7
Foreign exchange losses (gains)		1,261		(6	)		2,599		(429	)

	$	2,852	$	(45	)	$	4,412	$	(422	)


11.	Comprehensive Income (Loss)


	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
	(Amounts in thousands)

Net income (loss)	$	(93,420	)	$	7,314		$	(134,420	)	$	(103,807	)
Add (Deduct): Foreign currency translation adjustments		(6,954	)		119			(10,834	)		2,618
Add (Deduct): Net unrealized gain (loss) on foreign exchange contracts		103			(26	)		115			—
Add (Deduct): Unrealized gain (loss) on investments — available for sale		—			(387	)		73			(218	)

Comprehensive income (loss)	$	(100,271	)	$	7,020		$	(145,066	)	$	(101,407	)

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


12.	Income (Loss) Per Share and Treasury Shares

The Company calculates income (loss) per share in accordance with SFAS No. 128, Earnings Per Share . Basic income (loss) per share is calculated based on the weighted average common shares outstanding for the period. Basic income (loss) per share for the three and nine months ended December 31, 2008 and 2007 is presented below:


	Three Months			Three Months		Nine Months			Nine Months
	Ended			Ended		Ended			Ended
	December 31,			December 31,		December 31,			December 31,
	2008			2007		2008			2007
	(Amounts in thousands)

Basic Net Income (Loss) Per Common Share:
Numerator:
Net income (loss)	$	(93,420	)	$	7,314	$	(134,420	)	$	(103,807	)

Denominator:
Weighted average common shares outstanding		115,765			118,921		117,018			118,399

Basic Net Income (Loss) Per Common Share	$	(0.81	)	$	0.06	$	(1.15	)	$	(0.88	)

Diluted net income (loss) per common share reflects the potential dilutive effect, if any, of the 2.9375% Notes and the 3.625% Notes sold by the Company in October 2004 and February 2005, respectively, under the “if converted” method, the share purchase options and restricted share units using the treasury stock method when dilutive, and any contingently issuable shares. For the nine months ended December 31, 2008, the 12,182,824 and 13,043,475 weighted average shares issuable on the potential conversion of the 3.625% Notes and the 2.9375% Notes, respectively, 452,768 equivalent shares of stock options, and 429,939 restricted share units were excluded from diluted loss per common share for the period because their inclusion would have had an anti-dilutive effect. For the nine months ended December 31, 2007, the 12,252,328 and 13,043,475 weighted average shares issuable on the potential conversion of the 3.625% Notes and the 2.9375% Notes, respectively, 1,725,591 equivalent shares of stock options, and 494,861 restricted share units were excluded from diluted loss per common share for the period because their inclusion would have had an anti-dilutive effect. For the three months ended December 31, 2008, the 12,044,571 and 13,043,475 weighted average shares issuable on the potential conversion of the 3.625% Notes and the 2.9375% Notes, respectively, 15,258 equivalent shares of stock options, and 143,332 restricted share units were excluded from diluted loss per common share for the period because their inclusion would have had an anti-dilutive effect. Additionally, the 12,252,328 and 13,043,475 weighted average shares issuable on the potential conversion of the 3.625% Notes and the 2.9375% Notes, respectively, are not included in diluted income per share for the three months ended December 31, 2007 as their effect is anti-dilutive. Diluted net

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

income (loss) per common share for the three and nine months ended December 31, 2008 and 2007 is presented below:


	Three Months			Three Months		Nine Months			Nine Months
	Ended			Ended		Ended			Ended
	December 31,			December 31,		December 31,			December 31,
	2008			2007		2008			2007
	(Amounts in thousands)

Diluted Net Income (Loss) Per Common Share:
Numerator:
Net income (loss)	$	(93,420	)	$	7,314	$	(134,420	)	$	(103,807	)

Add:
Interest on convertible Notes, net of tax		—			—		—			—
Amortization of deferred financing costs, net of tax		—			—		—			—

Numerator for Diluted Net Income (Loss) Per Common Share	$	(93,420	)	$	7,314	$	(134,420	)	$	(103,807	)

Denominator:
Weighted average common shares outstanding		115,765			118,921		117,018			118,399
Effect of dilutive securities:
Conversion of Notes		—			—		—			—
Share purchase options		—			858		—			—
Restricted share units		—			518		—			—
Contingently issuable shares		—			—		—			—

Adjusted weighted average common shares outstanding		115,765			120,297		117,018			118,399

Diluted Net Income (Loss) Per Common Share	$	(0.81	)	$	0.06	$	(1.15	)	$	(0.88	)

The Company had 500,000,000 authorized common shares at December 31, 2008 and March 31, 2008. The table below outlines common shares reserved for future issuance:


	December 31,		March 31,
	2008		2008
	(Amounts in thousands)

Stock options outstanding		4,011		5,137
Restricted share units — unvested		2,636		2,325
Share purchase options and restricted share units available for future issuance		5,154		6,859
Shares issuable upon conversion of 2.9375% Notes at conversion price of $11.50 per share		13,043		13,043
Shares issuable upon conversion of 3.625% Notes at conversion price of $14.28 per share		11,622		12,252

Shares reserved for future issuance		36,466		39,616

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s Board of Directors has authorized the repurchase of up to $150 million of the Company’s common shares, with the timing, price, quantity, and manner of the purchases to be made at the discretion of management, depending upon market conditions. During the period from the authorization date through December 31, 2008, 6,787,310 shares have been repurchased pursuant to the plan at a cost of approximately $65.2 million, including commission costs. During the three and nine months ended December 31, 2008, 38,400 and 4,588,675 shares, respectively, have been repurchased pursuant to the plan at a cost of approximately $0.2 million and $45.0 million, respectively. The share repurchase program has no expiration date. The shares repurchased under the stock repurchase program are included in treasury shares in the accompanying unaudited condensed consolidated balance sheets and statements of shareholders’ equity.


13.	Accounting for Stock-Based Compensation

Share-Based Compensation

The Company accounts for stock-based compensation in accordance with the provisions of SFAS No. 123 (revised 2004), Share-Based Payment (“SFAS No. 123(R)”). SFAS No. 123(R) requires the measurement of all stock-based awards using a fair value method and the recognition of the related stock-based compensation expense in the consolidated financial statements over the requisite service period. Further, as required under SFAS No. 123(R), the Company estimates forfeitures for share-based awards that are not expected to vest. As stock-based compensation expense recognized in the Company’s unaudited condensed consolidated financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures.

The fair value of each option award is estimated on the date of grant using a closed-form option valuation model (Black-Scholes) based on the assumptions noted in the following table. Expected volatilities are based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock and other factors. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The weighted-average grant-date fair values for options granted during the nine months ended December 31, 2008 and 2007 was $3.06 and $4.17, respectively. The following table represents the assumptions used in the Black-Scholes option-pricing model for stock options granted during the nine months ended December 31, 2008 and 2007:


	Nine Months	Nine Months
	Ended	Ended
	December 31,	December 31,
	2008	2007

Risk-free interest rate	2.7%	4.1% - 4.8%
Expected option lives (in years)	5.0 years	5.6 to 6.5 years
Expected volatility for options	31%	31%
Expected dividend yield	0%	0%

The Company recognized the following share-based compensation expense (benefit) during the three and nine months ended December 31, 2008 and 2007:


	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2008			2007			2008			2007
	(Amounts in thousands)

Compensation Expense (Benefit):
Stock Options	$	800		$	897		$	2,399		$	2,533
Restricted Share Units		3,265			2,490			9,182			7,532
Stock Appreciation Rights		(2,654	)		(890	)		(3,300	)		(1,899	)

Total	$	1,411		$	2,497		$	8,281		$	8,166

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

There was no income tax benefit recognized in the statements of operations for share-based compensation arrangements during the three and nine months ended December 31, 2008 and 2007.

Stock Options

A summary of option activity as of December 31, 2008 and changes during the nine months then ended is presented below:


											Weighted		Aggregate
									Weighted-		Average		Intrinsic
						Total			Average		Remaining		Value as of
	Number of			Number of		Number of			Exercise		Contractual		December 31,
Options:	Shares(1)			Shares(2)		Shares			Price		Term in Years		2008

Outstanding at March 31, 2008		4,537,363			600,000		5,137,363		$	8.32
Granted		—			—		—			—
Exercised		(123,416	)		—		(123,416	)		6.68
Forfeited or expired		(20,334	)		—		(20,334	)		2.93

Outstanding at June 30, 2008		4,393,613			600,000		4,993,613		$	8.39

Granted		5,000			—		5,000			9.53
Exercised		(986,734	)		—		(986,734	)		3.25
Forfeited or expired		—			—		—			—

Outstanding at September 30, 2008		3,411,879			600,000		4,011,879		$	9.65

Granted		—			—		—			—
Exercised		—			—		—			—
Forfeited or expired		(1,167	)		—		(1,167	)		6.51

Outstanding at December 31, 2008		3,410,712			600,000		4,010,712		$	9.65		6.53	$	42,894

Outstanding as of December 31, 2008, vested or expected to vest in the future		3,408,879			600,000		4,008,879		$	9.65		6.53	$	42,894

Exercisable at December 31, 2008		1,988,628			100,000		2,088,628		$	9.39		5.10	$	42,894


(1)		Issued under our long-term incentive plans.

(2)		On September 10, 2007, in connection with the acquisition of Mandate Pictures (see Note 9), two executives entered into employment agreements with Lions Gate Films, Inc., a wholly-owned subsidiary of the Company. Pursuant to the employment agreements, the executives were granted an aggregate of 600,000 stock options, which vest over a three- to five-year period. The options were granted outside of our long-term incentive plans.

The total intrinsic value of options exercised as of each exercise date during the three and nine months ended December 31, 2008 were nil and $7.1 million, respectively (2007 — $0.1 million and $11.9 million, respectively).

During the nine months ended December 31, 2008, 234,982 shares were cancelled to fund withholding tax obligations upon exercise.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restricted Share Units

A summary of the status of the Company’s restricted share units as of December 31, 2008, and changes during the nine months then ended is presented below:


							Total			Weighted Average
	Number of			Number of			Number of			Grant Date Fair
Restricted Share Units:	Shares(1)			Shares(2)			Shares			Value

Outstanding at March 31, 2008		2,037,125			287,500			2,324,625		$	10.09
Granted		294,875			—			294,875			9.89
Vested		(332,331	)		—			(332,331	)		10.80
Forfeited		(1,791	)		—			(1,791	)		10.67

Outstanding at June 30, 2008		1,997,878			287,500			2,285,378		$	9.96

Granted		489,042			105,000			594,042			10.04
Vested		(360,622	)		(8,333	)		(368,955	)		9.70
Forfeited		(5,333	)		—			(5,333	)		9.66

Outstanding at September 30, 2008		2,120,965			384,167			2,505,132		$	10.02

Granted		283,106			—			283,106			6.65
Vested		(135,115	)		—			(135,115	)		10.47
Forfeited		(16,748	)		—			(16,748	)		9.37

Outstanding at December 31, 2008		2,252,208			384,167			2,636,375		$	9.64


(1)		Issued under our long-term incentive plans.

(1)		On September 10, 2007, in connection with the acquisition of Mandate Pictures (see Note 9), two executives entered into employment agreements with Lions Gate Films, Inc. Pursuant to the employment agreements, the executives were granted an aggregate of 287,500 restricted share units, which vest over a three- to five-year period, based on continued employment and 262,500 restricted share units, which vest over a five-year period, subject to the satisfaction of certain annual performance targets. The restricted share units were granted outside of our long-term incentive plans.

The fair values of restricted share units are determined based on the market value of the shares on the date of grant.

The following table summarizes the total remaining unrecognized compensation cost as of December 31, 2008 related to non-vested stock options and restricted share units and the weighted average remaining years over which the cost will be recognized:


	Total		Weighted
	Unrecognized		Average
	Compensation		Remaining
	Cost		Years
	(Amounts in thousands)

Stock Options	$	6,449		2.1
Restricted Share Units		17,444		1.9

Total	$	23,893

Under the Company’s two stock option and long term incentive plans, the Company withholds shares to satisfy certain statutory federal, state and local tax withholding obligations arising from the vesting of restricted share units. During the nine months ended December 31, 2008, 208,025 shares were withheld upon the vesting of restricted share units.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the stock options and restricted share units when vesting or exercise occurs, the restrictions are released and the shares are issued. Restricted share units are forfeited if the employees terminate prior to vesting.

Stock Appreciation Rights

On February 2, 2004, an officer of the Company was granted 1,000,000 stock appreciation rights (“SARs”), which entitles the officer to receive cash equal to the amount by which the trading price of the Company’s common shares on the exercise notice date exceeds the SARs’ price of $5.20 multiplied by the number of SARs exercised. These SARs are not considered part of the Company’s stock option and long term incentive plans. The Company measures compensation expense based on the fair value of the SARs, which is determined by using the Black-Scholes option-pricing model at each reporting date. For the three and nine months ended December 31, 2008, the following assumptions were used in the Black-Scholes option-pricing model: Volatility of 103.7%, Risk Free Rate of 0.11%, Expected Term of 0.1 years, and Dividend of 0%. At December 31, 2008, the market price of the Company’s common shares was $5.50, the weighted average fair value of the SARs was $0.82, and all 1,000,000 of the SARs had vested. Due to the decrease in the market price of its common shares during the quarter, the Company recorded a stock-based compensation benefit in the amount of $2.7 million and $3.3 million in general and administration expenses in the unaudited condensed consolidated statements of operations for the three and nine months ended December 31, 2008, respectively (2007 — decrease of expense of $0.9 million and $1.9 million, respectively). The compensation benefit amount in the period is calculated by using the fair value of the SARs, multiplied by the remaining 850,000 SARs which have fully vested (150,000 SARs were previously exercised and expensed). At December 31, 2008, the Company has a stock-based compensation liability accrual in the amount of $0.7 million (March 31, 2008 — $4.0 million) included in accounts payable and accrued liabilities on the unaudited condensed consolidated balance sheets relating to these SARs.

During the nine months ended December 31, 2008, a non-employee was granted 250,000 SARs with an exercise price of $11.16, which entitles the non-employee to receive cash equal to the amount by which the trading price of common shares on the exercise notice date exceeds the SARs’ price of $11.16 multiplied by the number of SARs exercised. The SARs vest over a four-year period. The Company measures compensation cost based on the fair value of the SARs, which is determined by using the Black-Scholes option-pricing model at each reporting date. For the nine months ended December 31, 2008, the following assumptions were used in the Black-Scholes option-pricing model: Volatility of 40%, Risk Free Rate of 1.0%, Expected Remaining Term of 3.5 years, and Dividend of 0%. At December 31, 2008, the market price of the Company’s common shares was $5.50 and the weighted average fair value of the SARs was $0.55. In connection with these SARs, the Company recorded a stock-based compensation expense in the amount of $0.1 million included in direct operating expenses in the unaudited condensed consolidated statements of operations for the nine months ended December 31, 2008. At December 31, 2008, the Company has a stock-based compensation liability accrual in the amount of $0.1 million (March 31, 2008 — nil) included in accounts payable and accrued liabilities on the unaudited condensed consolidated balance sheets relating to these SARs.

During the nine months ended December 31, 2008, a non-employee was granted 750,000 SARs with exercise price of $9.56, which entitles the non-employee to receive cash equal to the amount by which the trading price of common shares on the exercise notice date exceeds the SARs’ price of $9.56 multiplied by the number of SARs exercised. The SARs vest over a three-year period based on the commencement of principal photography of certain production of motion pictures. The Company measures compensation cost based on the fair value of the SARs, which is determined by using the Black-Scholes option-pricing model at each reporting date. For the nine months ended December 31, 2008, the following assumptions were used in the Black-Scholes option-pricing model: Volatility of 40%, Risk Free Rate of 1.6%, Expected Remaining Term of 4.5 years, and Dividend of 0%. At December 31, 2008, the market price of the Company’s common shares was $5.50, the weighted average fair value of the SARs was $1.01. The Company recorded a portion of the fair value of the SARs, which represents the progress towards commencement of principal photography of the first production, of $0.1 million in investment in films and television programs on the unaudited condensed consolidated balance sheets. At December 31, 2008, the Company has a stock-based compensation liability accrual in the amount of $0.1 million (March 31, 2008 — nil) included in accounts payable and accrued liabilities on the unaudited condensed consolidated balance sheets relating to these SARs.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


14.	Segment Information

SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information , requires the Company to make certain disclosures about each reportable segment. The Company’s reportable segments are determined based on the distinct nature of their operations and each segment is a strategic business unit that offers different products and services and is managed separately. The Company evaluates performance of each segment using segment profit (loss) as defined below. The Company has two reportable business segments: Motion Pictures and Television.

Motion Pictures consists of the development and production of feature films, acquisition of North American and worldwide distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and worldwide licensing of distribution rights to feature films produced and acquired.

Television consists of the development, production and worldwide distribution of television productions, including television series, television movies and mini-series and non-fiction programming.

Segmented information by business unit is as follows:


	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
	(Amounts in thousands)

Segment revenues
Motion Pictures	$	254,861		$	260,967		$	824,391		$	673,422
Television		69,166			38,041			178,813			176,072

	$	324,027		$	299,008		$	1,003,204		$	849,494

Direct operating expenses
Motion Pictures	$	164,566		$	107,928		$	423,075		$	253,654
Television		54,086			32,123			143,446			157,790

	$	218,652		$	140,051		$	566,521		$	411,444

Distribution and marketing
Motion Pictures	$	164,756		$	115,273		$	441,652		$	440,894
Television		5,644			4,542			17,130			11,615

	$	170,400		$	119,815		$	458,782		$	452,509

General and administration
Motion Pictures	$	11,593		$	10,961		$	36,468		$	29,493
Television		3,135			1,688			8,463			4,566

	$	14,728		$	12,649		$	44,931		$	34,059

Segment profit (loss)
Motion Pictures	$	(86,054	)	$	26,805		$	(76,804	)	$	(50,619	)
Television		6,301			(312	)		9,774			2,101

	$	(79,753	)	$	26,493		$	(67,030	)	$	(48,518	)

Acquisition of investment in films and television programs
Motion Pictures	$	123,312		$	133,313		$	325,072		$	282,492
Television		22,820			5,749			146,236			115,281

	$	146,132		$	139,062		$	471,308		$	397,773

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Purchases of property and equipment amounted to $0.7 million and $6.5 million for the three and nine months ended December 31, 2008, respectively, and nil and $2.7 million for the three and nine months ended December 31, 2007, respectively, all primarily pertaining to purchases for the Company’s corporate headquarters.

Segment profit (loss) is defined as segment revenue less segment direct operating, distribution and marketing, and general and administration expenses. The reconciliation of total segment profit (loss) to the Company’s income (loss) before income taxes is as follows:


	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
	(Amounts in thousands)

Company’s total segment profit (loss)	$	(79,753	)	$	26,493		$	(67,030	)	$	(48,518	)
Less:
Corporate general and administration		(12,744	)		(14,857	)		(51,449	)		(46,658	)
Depreciation		(1,374	)		(954	)		(3,616	)		(2,900	)
Interest expense		(4,302	)		(4,085	)		(13,803	)		(12,170	)
Interest and other income		860			2,510			5,062			8,948
Gain on sale of equity securities		—			83			—			2,868
Gain on extinguishment of debt		3,549			—			3,549			—
Equity interests loss		(1,695	)		(1,248	)		(5,841	)		(3,242	)

Income (loss) before income taxes	$	(95,459	)	$	7,942		$	(133,128	)	$	(101,672	)

The following table sets forth significant assets as broken down by segment and other unallocated assets as of December 31, 2008 and March 31, 2008:


	December 31, 2008						March 31, 2008
	Motion						Motion
	Pictures		Television		Total		Pictures		Television		Total
	(Amounts in thousands)

Significant assets by segment
Accounts receivable	$	104,554	$	74,091	$	178,645	$	193,810	$	66,474	$	260,284
Investment in films and television programs		653,339		105,305		758,644		540,527		68,415		608,942
Goodwill		210,252		13,961		224,213		210,570		13,961		224,531

	$	968,145	$	193,357	$	1,161,502	$	944,907	$	148,850	$	1,093,757

Other unallocated assets (primarily cash and restricted investments)						259,579						444,001

Total assets					$	1,421,081					$	1,537,758


15.	Contingencies

The Company is, from time to time, involved in various claims, legal proceedings and complaints arising in the ordinary course of business. The Company does not believe that adverse decisions in any such pending or threatened proceedings, or any amount which the Company might be required to pay by reason thereof, would have a material adverse effect on the financial condition or future results of the Company.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


16.	Consolidating Financial Information

In October 2004, the Company sold $150.0 million of the 2.9375% Notes through LGEI. The 2.9375% Notes, by their terms, are fully and unconditionally guaranteed by the Company.

In February 2005, the Company sold $175.0 million of the 3.625% Notes through LGEI. The 3.625% Notes, by their terms, are fully and unconditionally guaranteed by the Company.

The following tables present unaudited condensed consolidating financial information as of December 31, 2008 and March 31, 2008, and for the nine months ended December 31, 2008 and 2007 for (1) the Company, on a stand-alone basis, (2) LGEI, on a stand-alone basis, (3) the non-guarantor subsidiaries of the Company (including the subsidiaries of LGEI), on a combined basis (collectively, the “Other Subsidiaries”) and (4) the Company, on a consolidated basis.


	As of December 31, 2008
	Lions Gate			Lions Gate
	Entertainment			Entertainment			Other			Consolidating			Lions Gate
	Corp.			Inc.			Subsidiaries			Adjustments			Consolidated
	(Amounts in thousands)

BALANCE SHEET
Assets
Cash and cash equivalents	$	10,724		$	87,235		$	32,754		$	—		$	130,713
Restricted cash		—			17,000			—			—			17,000
Restricted investments		—			7,000			—			—			7,000
Accounts receivable, net		121			1,230			177,294			—			178,645
Investment in films and television programs		66			6,749			751,888			(59	)		758,644
Property and equipment		—			15,417			1,150			—			16,567
Goodwill		10,173			—			214,040			—			224,213
Other assets		1,665			412,871			2,126			(328,363	)		88,299
Investment in subsidiaries		131,995			513,311			—			(645,306	)		—

	$	154,744		$	1,060,813		$	1,179,252		$	(973,728	)	$	1,421,081

Liabilities and Shareholders’ Equity (Deficiency)
Accounts payable and accrued liabilities	$	213		$	17,676		$	246,550		$	—		$	264,439
Participation and residuals		158			815			408,446			—			409,419
Film and production obligations		66			—			297,077			—			297,143
Subordinated notes and other financing obligations		—			316,000			3,718			—			319,718
Deferred revenue		3			490			118,350			—			118,843
Intercompany payables (receivables)		(177,200	)		661,288			(63,415	)		(420,673	)		—
Intercompany equity		319,985			93,217			330,570			(743,772	)		—
Shareholders’ equity (deficiency)		11,519			(28,673	)		(162,044	)		190,717			11,519

	$	154,744		$	1,060,813		$	1,179,252		$	(973,728	)	$	1,421,081

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	Nine Months Ended December 31, 2008
	Lions Gate			Lions Gate
	Entertainment			Entertainment			Other			Consolidating			Lions Gate
	Corp.			Inc.			Subsidiaries			Adjustments			Consolidated
	(Amounts in thousands)

STATEMENT OF OPERATIONS
Revenues	$	580		$	19,287		$	1,009,574		$	(26,237	)	$	1,003,204
EXPENSES:
Direct operating		674			51			567,876			(2,080	)		566,521
Distribution and marketing		—			548			458,270			(36	)		458,782
General and administration		757			50,743			44,880			—			96,380
Depreciation		—			3,003			613			—			3,616

Total expenses		1,431			54,345			1,071,639			(2,116	)		1,125,299

OPERATING LOSS		(851	)		(35,058	)		(62,065	)		(24,121	)		(122,095	)

Other expenses (income):
Interest expense		15			12,760			1,028			—			13,803
Interest and other income		(170	)		(3,564	)		(1,328	)		—			(5,062	)
Gain on extinguishment of debt		—			(3,549	)		—			—			(3,549	)

Total other expenses (income)		(155	)		5,647			(300	)		—			5,192

INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES		(696	)		(40,705	)		(61,765	)		(24,121	)		(127,287	)
Equity interests income (loss)		(133,713	)		(83,035	)		(4,030	)		214,937			(5,841	)

INCOME (LOSS) BEFORE INCOME TAXES		(134,409	)		(123,740	)		(65,795	)		190,816			(133,128	)
Income tax provision (benefit)		11			1,036			247			(2	)		1,292

NET INCOME (LOSS)	$	(134,420	)	$	(124,776	)	$	(66,042	)	$	190,818		$	(134,420	)

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	Nine Months Ended December 31, 2008
	Lions Gate			Lions Gate
	Entertainment			Entertainment			Other			Consolidating		Lions Gate
	Corp.			Inc.			Subsidiaries			Adjustments		Consolidated
	(Amounts in thousands)

STATEMENT OF CASH FLOWS
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	52,992		$	(248,097	)	$	99,196		$	—	$	(95,909	)

INVESTING ACTIVITIES:
Investment in equity method investees		—			—			(15,886	)		—		(15,886	)
Increase in loan receivables		—			(3,767	)		(25,000	)				(28,767	)
Purchases of property and equipment		—			(6,172	)		(293	)		—		(6,465	)

NET CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES		—			(9,939	)		(41,179	)		—		(51,118	)

FINANCING ACTIVITIES:
Exercise of stock options		2,894			—			—			—		2,894
Amounts paid to satisfy tax withholding requirements on options exercised		(3,134	)		—			—			—		(3,134	)
Repurchases of common shares		(44,968	)		—			—			—		(44,968	)
Increase in production obligations		—			—			126,420					126,420
Repayment of production obligations		—			—			(165,298	)				(165,298	)
Repayment of subordinated notes		—			(5,310	)		—			—		(5,310	)

NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES		(45,208	)		(5,310	)		(38,878	)		—		(89,396	)

NET CHANGE IN CASH AND CASH EQUIVALENTS		7,784			(263,346	)		19,139			—		(236,423	)

FOREIGN EXCHANGE EFFECT ON CASH		(1,534	)		—			(2,919	)		—		(4,453	)
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD		4,474			350,581			16,534			—		371,589

CASH AND CASH EQUIVALENTS — END OF PERIOD	$	10,724		$	87,235		$	32,754		$	—	$	130,713

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	As of March 31, 2008
	Lions Gate			Lions Gate
	Entertainment			Entertainment			Other			Consolidating			Lions Gate
	Corp.			Inc.			Subsidiaries			Adjustments			Consolidated
	(Amounts in thousands)

BALANCE SHEET
Assets
Cash and cash equivalents	$	4,474		$	350,581		$	16,534		$	—		$	371,589
Restricted cash		—			10,300			—			—			10,300
Restricted investments		—			6,927			—			—			6,927
Accounts receivable, net		344			—			260,635			(695	)		260,284
Investment in films and television programs		871			6,683			601,246			142			608,942
Property and equipment		—			12,428			1,185			—			13,613
Goodwill		10,173			—			214,358			—			224,531
Other assets		1,983			268,070			4,217			(232,698	)		41,572
Investment in subsidiaries		264,329			594,542			—			(858,871	)		—

	$	282,174		$	1,249,531		$	1,098,175		$	(1,092,122	)	$	1,537,758

Liabilities and Shareholders’ Equity (Deficiency)
Accounts payable and accrued liabilities	$	540		$	31,913		$	212,980		$	(3	)	$	245,430
Participation and residuals		187			1,567			384,228			(136	)		385,846
Film and production obligations		78			—			277,938			—			278,016
Subordinated notes and other financing obligations		—			325,000			3,718			—			328,718
Deferred revenue		—			1,026			110,484			—			111,510
Intercompany payables (receivables)		(226,854	)		852,748			(218,788	)		(407,106	)		—
Intercompany equity		319,985			93,217			329,597			(742,799	)		—
Shareholders’ equity (deficiency)		188,238			(55,940	)		(1,982	)		57,922			188,238

	$	282,174		$	1,249,531		$	1,098,175		$	(1,092,122	)	$	1,537,758

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	Nine Months Ended December 31, 2007
	Lions Gate			Lions Gate
	Entertainment			Entertainment			Other			Consolidating			Lions Gate
	Corp.			Inc.			Subsidiaries			Adjustments			Consolidated
	(Amounts in thousands)

STATEMENT OF OPERATIONS
Revenues	$	141		$	12,423		$	846,426		$	(9,496	)	$	849,494
EXPENSES:
Direct operating		—			—			411,444			—			411,444
Distribution and marketing		—			1,414			451,095			—			452,509
General and administration		1,021			45,242			34,454			—			80,717
Depreciation		—			2			2,898			—			2,900

Total expenses		1,021			46,658			899,891			—			947,570

OPERATING LOSS		(880	)		(34,235	)		(53,465	)		(9,496	)		(98,076	)

Other Expense (Income):
Interest expense		—			11,837			360			(27	)		12,170
Interest income		(169	)		(8,273	)		(533	)		27			(8,948	)
Gain on sale of equity securities		—			—			(2,868	)		—			(2,868	)

Total other expenses (income)		(169	)		3,564			(3,041	)		—			354

INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES		(711	)		(37,799	)		(50,424	)		(9,496	)		(98,430	)
Equity interests income (loss)		(103,726	)		(59,677	)		(3,171	)		163,332			(3,242	)

INCOME (LOSS) BEFORE INCOME TAXES		(104,437	)		(97,476	)		(53,595	)		153,836			(101,672	)
Income tax provision (benefit)		(630	)		222			2,543			—			2,135

NET INCOME (LOSS)	$	(103,807	)	$	(97,698	)	$	(56,138	)	$	153,836		$	(103,807	)

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	Nine Months Ended December 31, 2007
	Lions Gate			Lions Gate
	Entertainment			Entertainment			Other			Consolidating			Lions Gate
	Corp.			Inc.			Subsidiaries			Adjustments			Consolidated
	(Amounts in thousands)

STATEMENT OF CASH FLOWS
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	26,642		$	(67,338	)	$	(48,777	)	$	(1,740	)	$	(91,213	)

INVESTING ACTIVITIES:
Purchases of investments — auction rate securities		—			(207,262	)		—			—			(207,262	)
Proceeds from the sale of investments — auction rate securities		—			444,641			—			—			444,641
Purchases of investments — equity securities		—			—			(4,765	)		—			(4,765	)
Proceeds from the sale of investments — equity securities		—			16,343			7,692			—			24,035
Acquisition of Mandate, net of unrestricted cash acquired		—			(45,157	)		3,952			—			(41,205	)
Acquisition of Maple, net of unrestricted cash acquired		—			—			1,737			—			1,737
Investment in equity method investees		—			(3,099	)		(3,365	)		—			(6,464	)
Increase in loan receivables		—			(5,895	)		—			—			(5,895	)
Purchases of property and equipment		—			(1,408	)		(1,334	)		—			(2,742	)

NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES		—			198,163			3,917			—			202,080

FINANCING ACTIVITIES:
Exercise of stock options		864			—			—			—			864
Tax withholding requirements on equity awards		(4,723	)		—			—			—			(4,723	)
Repurchases of common shares		(20,337	)		—			—			—			(20,337	)
Borrowings under financing arrangements		—			—			3,718			—			3,718
Increase in production obligations		—			—			131,318			—			131,318
Repayment of production obligations		—			—			(91,339	)		—			(91,339	)

NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES		(24,196	)		—			43,697			—			19,501

NET CHANGE IN CASH AND CASH EQUIVALENTS		2,446			130,825			(1,163	)		(1,740	)		130,368

FOREIGN EXCHANGE EFFECT ON CASH		(927	)		(498	)		3,115			—			1,690
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD		1,908			28,347			21,242			—			51,497

CASH AND CASH EQUIVALENTS —
END OF PERIOD	$	3,427		$	158,674		$	23,194		$	(1,740	)	$	183,555

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


17.	Subsequent Events

In January 2009, the Company entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”) with Gemstar-TV Guide International, Inc. (“Gemstar”), TV Guide Entertainment Group, Inc. (“TVGE”), its parent company, UV Corporation and Macrovision Solutions Corporation (“Macrovision”), the ultimate parent company of Gemstar, TVGE and UV Corporation, for the purchase by the Company from UV Corporation of all of the issued and outstanding equity interests of TVGE for approximately $255 million in cash and assumed liabilities, subject to working capital and other indebtedness adjustments, to be measured at closing, which is expected to be on or about February 28, 2009. In connection with the transaction, Gemstar will also transfer, assign and license to the Company certain assets related to the TV Guide Network and the TV Guide Online (tvguide.com) business. The Company anticipates funding this acquisition through cash on hand and available funds.


Item 2.	*Management’s Discussion and Analysis of Financial Condition and Results of Operations.*

Overview

Lions Gate Entertainment Corp. (“Lionsgate,” the “Company,” “we,” “us” or “our”) is a leading next generation filmed entertainment studio with a diversified presence in the production and distribution of motion pictures, television programming, home entertainment, family entertainment, video-on-demand and digitally delivered content. We release approximately 12 to 15 motion pictures theatrically per year, which include films we develop and produce in-house, as well as films that we acquire from third parties. We also have produced approximately 76 hours of television programming on average for the last three years, primarily prime time television series for the cable and broadcast networks. We currently distribute our library of approximately 8,000 motion picture titles and approximately 4,000 television episodes and programs directly to retailers, DVD rental stores, and pay and free television channels in the United States (the “U.S.”), Canada, the United Kingdom (the “UK”) and Ireland, through various digital media platforms, and indirectly to other international markets through our subsidiaries and various third parties.

We own interests in Horror Entertainment, LLC, a multiplatform programming and content service provider of horror genre films (“FEARnet”), NextPoint, Inc., an online home entertainment service provider (“Break.com”), Roadside Attractions, LLC, an independent theatrical releasing company (“Roadside”), Elevation Sales Limited, a UK based home entertainment distributor (“Elevation”), Maple Pictures Corp., a Canadian film, television and home entertainment distributor (“Maple Pictures”), and Studio 3 Partners, LLC, a premium television channel (“EPIX”).

Our revenues are derived from the following business segments:


	•	Motion Pictures, which includes “Theatrical,” “Home Entertainment,” “Television,” “International Distribution” and “Mandate Pictures.”


		Theatrical revenues are derived from the theatrical release of motion pictures in the U.S. and Canada which are distributed to theatrical exhibitors on a picture by picture basis. The financial terms that we negotiate with our theatrical exhibitors generally provide that we receive a percentage of the box office results and are negotiated on a picture by picture basis.

		Home Entertainment revenues consist of sale or rental of packaged media (i.e., DVD and Blu-Ray) and electronic media (“EST”) of our own productions and acquired films, including theatrical releases and direct-to-video releases, to retail stores and through digital media platforms. In addition, we have revenue sharing arrangements with certain rental stores which generally provide that in exchange for a nominal or no upfront sales price we share in the rental revenues generated by each such store on a title by title basis.

		Television revenues are primarily derived from the licensing of our productions and acquired films to the domestic cable, free and pay television markets.

		International revenues include revenues from our international subsidiaries from the licensing and sale of our productions, acquired films, our catalog product or libraries of acquired titles and revenue from our direct distribution to international markets on a territory-by-territory basis. Our revenues are derived from the U.S., Canada, UK, Australia and many other foreign countries; none of the foreign countries individually comprised greater than 10% of total revenue.

		Mandate Pictures revenues include revenue from the sales and licensing of domestic and worldwide rights of titles developed or acquired by Mandate Pictures to third-party distributors as well as various titles sold by Mandate International, LLC, one of the Company’s international divisions, to international sub-distributors.


	•	Television Productions, which includes the licensing and syndication to domestic and international markets of one-hour and half-hour drama series, television movies and mini-series and non-fiction programming and revenues from the sale of home entertainment product (i.e., packaged media and EST) consisting of television production movies or series.

Our primary operating expenses include the following:


	•	Direct Operating Expenses, which include amortization of production or acquisition costs, participation and residual expenses and provision for doubtful accounts. Participation costs represent contingent consideration payable based on the performance of the film to parties associated with the film, including producers, writers, directors or actors, etc. Residuals represent amounts payable to various unions or “guilds” such as the Screen Actors Guild, Directors Guild of America, and Writers Guild of America, based on the performance of the film in certain ancillary markets or based on the individual’s (i.e., actor, director, writer) salary level in the television market.

	•	Distribution and Marketing Expenses, which primarily include the costs of theatrical “prints and advertising” and of DVD duplication and marketing. Theatrical print and advertising represent the costs of the theatrical prints delivered to theatrical exhibitors and advertising includes the advertising and marketing cost associated with the theatrical release of the picture. DVD duplication represent the cost of the DVD product and the manufacturing costs associated with creating the physical products. DVD marketing costs represent the cost of advertising the product at or near the time of its release or special promotional advertising.

	•	General and Administration Expenses, which include salaries and other overhead.

Recent Developments

Studio 3 Partners, LLC. In April 2008, the Company formed a joint venture with Viacom Inc. (“Viacom”), its Paramount Pictures unit (“Paramount Pictures”) and Metro-Goldwyn-Mayer Studios Inc. (“MGM”) to create a premium television channel and subscription video-on-demand service named “EPIX”. The new venture will have access to the Company’s titles released theatrically on or after January 1, 2009. Viacom will provide operational support to the venture, including marketing and affiliate services through its MTV Networks division. Upon its expected launch in the fall of 2009, the joint venture will provide the Company with an additional platform to distribute its library of motion picture titles and television episodes and programs. The Company has invested $10.3 million as of December 31, 2008, which represents 28.57% or its proportionate share of investment in the joint venture. The Company has a mandatory commitment of $31.4 million increasing to $42.9 million if certain performance targets are achieved. The Company recorded its share of the joint venture results on a one quarter lag, in the current quarter.

Amended Credit Facility. In July 2008, the Company entered into an amended credit facility, which provides for a $340 million secured revolving credit facility, of which $30 million may be utilized by two of the Company’s wholly owned foreign subsidiaries. The amended credit facility expires July 25, 2013 and bears interest at 2.25% over the “Adjusted LIBOR” rate. At December 31, 2008, the Company had no borrowings (March 31, 2008 — nil) under the credit facility. The availability of funds under the credit facility is limited by a borrowing base and also reduced by outstanding letters of credit, which amounted to $22.7 million at December 31, 2008. At December 31, 2008, there was $317.3 million available under the amended credit facility. The Company is required to pay a monthly commitment fee based upon 0.50% per annum on the total credit facility of $340 million less the amount drawn. This amended credit facility amends and restates the Company’s original $215 million credit facility. Obligations under the credit facility are secured by collateral (as defined in the credit agreement) granted by the Company and certain subsidiaries of the Company, as well as a pledge of equity interests in certain of the Company’s subsidiaries. The amended credit facility contains a number of affirmative and negative covenants that, among other things, require the Company to satisfy certain financial covenants and restrict the ability of the Company to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, enter into sale-leaseback transactions, transfer and sell material assets and merge or consolidate.

TV Guide Purchase Agreement. In January 2009, the Company entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”) with Gemstar-TV Guide International, Inc. (“Gemstar”), TV Guide Entertainment Group, Inc. (“TVGE”), its parent company, UV Corporation and Macrovision Solutions Corporation (“Macrovision”), the ultimate parent company of Gemstar, TVGE and UV Corporation, for the purchase by the Company from UV Corporation of all of the issued and outstanding equity interests of TVGE for approximately

$255 million in cash and assumed liabilities, subject to working capital and other indebtedness adjustments, to be measured at closing, which is expected to be on or about February 28, 2009. In connection with the transaction, Gemstar will also transfer, assign and license to the Company certain assets related to the TV Guide Network and the TV Guide Online (tvguide.com) business. The Company anticipates funding this acquisition through cash on hand and available funds.

CRITICAL ACCOUNTING POLICIES

The application of the following accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management. As described more fully below, these estimates bear the risk of change due to the inherent uncertainty attached to the estimate. For example, accounting for films and television programs requires the Company to estimate future revenue and expense amounts which, due to the inherent uncertainties involved in making such estimates, are likely to differ to some extent from actual results. For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 2 to our March 31, 2008 audited consolidated financial statements.

Generally Accepted Accounting Principles (“GAAP”). Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP.

Accounting for Films and Television Programs. We capitalize costs of production and acquisition, including financing costs and production overhead, to investment in films and television programs. These costs are amortized to direct operating expenses in accordance with Statement of Position 00-2, Accounting by Producers or Distributors of Films (“SoP 00-2”). These costs are stated at the lower of unamortized films or television program costs or estimated fair value. These costs for an individual film or television program are amortized and participation and residual costs are accrued in the proportion that current year’s revenues bear to management’s estimates of the ultimate revenue at the beginning of the year expected to be recognized from exploitation, exhibition or sale of such film or television program over a period not to exceed ten years from the date of initial release. For previously released film or television programs acquired as part of a library, ultimate revenue includes estimates over a period not to exceed 20 years from the date of acquisition.

The Company’s management regularly reviews and revises, when necessary, its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value. The Company’s management estimates the ultimate revenue based on experience with similar titles or title genre, the general public appeal of the cast, actual performance (when available) at the box office or in markets currently being exploited, and other factors such as the quality and acceptance of motion pictures or programs that our competitors release into the marketplace at or near the same time, critical reviews, general economic conditions and other tangible and intangible factors, many of which we do not control and which may change. In the normal course of our business, some films and titles are more successful than anticipated and some are less successful. Accordingly, we update our estimates of ultimate revenue and participation costs based upon the actual results achieved or new information as to anticipated revenue performance such as (for home entertainment revenues) initial orders and demand from retail stores when it becomes available. An increase in the ultimate revenue will generally result in a lower amortization rate while a decrease in the ultimate revenue will generally result in a higher amortization rate and periodically results in an impairment requiring a write down of the film cost to the title’s fair value. These write downs are included in amortization expense within direct operating expenses in our consolidated statements of operations.

Revenue Recognition. Revenue from the sale or licensing of films and television programs is recognized upon meeting all recognition requirements of SoP 00-2. Revenue from the theatrical release of feature films is recognized at the time of exhibition based on the Company’s participation in box office receipts. Revenue from the sale of DVDs in the retail market, net of an allowance for estimated returns and other allowances, is recognized on the later of receipt by the customer or “street date” (when it is available for sale by the customer). Under revenue sharing arrangements, rental revenue is recognized when the Company is entitled to receipts and such receipts are determinable. Revenues from television licensing are recognized when the feature film or television program is available to the licensee for telecast. For television licenses that include separate availability “windows” during the

license period, revenue is allocated over the “windows.” Revenue from sales to international territories are recognized when access to the feature film or television program has been granted or delivery has occurred, as required under the sales contract, and the right to exploit the feature film or television program has commenced. For multiple media rights contracts with a fee for a single film or television program where the contract provides for media holdbacks (defined as contractual media release restrictions), the fee is allocated to the various media based on management’s assessment of the relative fair value of the rights to exploit each media and is recognized as each holdback is released. For multiple-title contracts with a fee, the fee is allocated on a title-by-title basis, based on management’s assessment of the relative fair value of each title.

Cash payments received are recorded as deferred revenue until all the conditions of revenue recognition have been met. Long-term, non-interest bearing receivables are discounted to present value.

Reserves. Revenues are recorded net of estimated returns and other allowances. We estimate reserves for DVD returns based on previous returns and our estimated expected future returns related to current period sales on a title-by-title basis in each of the DVD businesses. Factors affecting actual returns include limited retail shelf space at various times of the year, success of advertising or other sales promotions, the near term release of competing titles, among other factors. We believe that our estimates have been materially accurate in the past; however, due to the judgment involved in establishing reserves, we may have adjustments to our historical estimates in the future.

We estimate provisions for accounts receivable based on historical experience and relevant facts and information regarding the collectability of the accounts receivable. In performing this evaluation, significant judgments and estimates are involved, including an analysis of specific risks on a customer-by-customer basis for our larger customers and an analysis of the length of time receivables have been past due. The financial condition of a given customer and its ability to pay may change over time and could result in an increase or decrease to our allowance for doubtful accounts, which, when the impact of such change is material, is disclosed in our discussion on direct operating expenses elsewhere in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Income Taxes. The Company is subject to federal and state income taxes in the U.S., and in several foreign jurisdictions. We account for income taxes according to Statement of Financial Accounting Standards (“SFAS”) SFAS No. 109, Accounting for Income Taxes (“SFAS No. 109”). SFAS No. 109 requires the recognition of deferred tax assets, net of applicable reserves, related to net operating loss carryforwards and certain temporary differences. The standard requires recognition of a future tax benefit to the extent that realization of such benefit is more likely than not or a valuation allowance is applied. Because of our historical operating losses, we have provided a full valuation allowance against our net deferred tax assets. When we have a history of profitable operations sufficient to demonstrate that it is more likely than not that our deferred tax assets will be realized, the valuation allowance will be reversed. However, this assessment of our planned use of our deferred tax assets is an estimate which could change in the future depending upon the generation of taxable income in amounts sufficient to realize our deferred tax assets.

Goodwill. Goodwill is reviewed annually for impairment within each fiscal year or between the annual tests if an event occurs or circumstances change that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. The Company performs its annual impairment test as of December 31 in each fiscal year. The Company performed its annual impairment test on its goodwill as of December 31, 2007 and will be updating its assessment as of December 31, 2008. No goodwill impairment was identified in any of the Company’s reporting units. Determining the fair value of reporting units requires various assumptions and estimates. The estimates of fair value include consideration of the future projected operating results and cash flows of the reporting unit. Such projections could be different than actual results. Should actual results be significantly less than estimates, the value of our goodwill could be impaired in the future.

Business Acquisitions. The Company accounts for its business acquisitions as a purchase, whereby the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair value. The excess of the purchase price over estimated fair value of the net identifiable assets is allocated to goodwill. Determining the fair value of assets and liabilities requires various assumptions and estimates. These estimates and assumptions are refined with adjustments recorded to goodwill as information is gathered and final appraisals are completed over the allocation period allowed under SFAS No. 141. The changes in these estimates could impact the amount of assets, including

goodwill and liabilities, ultimately recorded in our balance sheet and could impact our operating results subsequent to such acquisition. We believe that our estimates have been materially accurate in the past.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). SFAS No. 141(R) significantly changes the accounting for business combinations in a number of areas including the treatment of contingent consideration, preacquisition contingencies, transaction costs, in-process research and development and restructuring costs. In addition, under SFAS No. 141(R), changes in an acquired entity’s deferred tax assets and uncertain tax positions after the measurement period will impact income tax expense. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008. We will adopt SFAS No. 141(R) beginning in the first quarter of fiscal 2010, which will change our accounting treatment for business combinations on a prospective basis.

Results of Operations

Three Months Ended December 31, 2008 Compared to Three Months Ended December 31, 2007

Consolidated revenues this quarter of $324.0 million increased $25.0 million, or 8.4%, compared to $299.0 million in the prior year’s quarter. Motion pictures revenue of $254.9 million this quarter decreased $6.1 million, or 2.3%, compared to $261.0 million in the prior year’s quarter. Television revenues of $69.2 million this quarter increased $31.2 million, or 82.1%, compared to $38.0 million in the prior year’s quarter.

Our largest component of revenue comes from home entertainment. The following table sets forth total home entertainment revenue for both the Motion Pictures and Television Production reporting segments for the three-month periods ended December 31, 2008 and 2007:


	Three Months		Three Months
	Ended		Ended
	December 31,		December 31,		Increase (Decrease)
	2008		2007		Amount			Percent
	(Amounts in millions)

Home Entertainment Revenue
Motion Picture	$	94.6	$	107.4	$	(12.8	)		(11.9	)%
Television Production		6.9		7.2		(0.3	)		(4.2	)%

	$	101.5	$	114.6	$	(13.1	)		(11.4	)%

Motion Pictures Revenue

The decrease in motion pictures revenue this quarter was mainly attributable to decreases in home entertainment, international, and Mandate Pictures revenue, offset by increases in theatrical and television revenue. The following table sets forth the components of revenue for the motion pictures reporting segment for the three-month periods ended December 31, 2008 and 2007:


	Three Months		Three Months
	Ended		Ended
	December 31,		December 31,		Increase (Decrease)
	2008		2007		Amount			Percent
	(Amounts in millions)

Motion Pictures
Theatrical	$	69.3	$	63.8	$	5.5			8.6	%
Home Entertainment		94.6		107.4		(12.8	)		(11.9	)%
Television		39.0		31.3		7.7			24.6	%
International		41.1		44.6		(3.5	)		(7.8	)%
Mandate Pictures		8.3		12.5		(4.2	)		(33.6	)%
Other		2.6		1.4		1.2			85.7	%

	$	254.9	$	261.0	$	(6.1	)		(2.3	)%

The following table sets forth the titles contributing significant motion pictures revenue for the three-month periods ended December 31, 2008 and 2007:


Three Months Ended December 31,
2008		2007
	Theatrical and DVD		Theatrical and DVD
Title	Release Date	Title	Release Date

Theatrical:		Theatrical:
Religulous	October 2008	3:10 to Yuma	September 2007
Saw V	October 2008	Good Luck Chuck	September 2007
The Spirit	December 2008	Saw IV	October 2007
Transporter III	November 2008	Why Did I Get
W.	October 2008	Married? — Feature	October 2007
Home Entertainment:		Home Entertainment:
Beer for My Horses	November 2008	Bratz: The Movie	November 2007
Rambo	May 2008	Captivity	October 2007
The Bank Job	July 2008	Delta Farce	September 2007
The Forbidden		Saw III	January 2007
Kingdom	September 2008	Skinwalkers	November 2007
War	January 2008	The Condemned	September 2007


Television:		Television:
Meet the Browns		Crash
Rambo		Daddy’s Little Girls
The Bank Job		Happily N’Ever After
The Eye		Pride
International:		International:
Conan the Barbarian		Catacombs
Punisher: War Zone		Good Luck Chuck
Saw V		Saw IV
The Eye		War
Mandate Pictures:		Mandate Pictures:
Juno		30 Days of Night
Nick and Norah’s Infinite Playlist		Juno
Passengers		Mr. Magorium’s Wonder Emporium
		The Boogeyman 2

Theatrical revenue of $69.3 million increased $5.5 million, or 8.6%, in this quarter as compared to the prior year’s quarter. In this quarter, the titles listed in the above table as contributing significant theatrical revenue represented individually between 7% and 38% of total theatrical revenue and, in the aggregate, approximately 89%, or $61.7 million of total theatrical revenue. In the prior year’s quarter, the titles listed in the above table as contributing significant theatrical revenue represented individually between 8% and 45% of total theatrical revenue and, in the aggregate, approximately 100%, or $64.2 million of total theatrical revenue.

Home entertainment revenue from the motion picture reporting segment of $94.6 million decreased $12.8 million, or 11.9%, in this quarter as compared to the prior year’s quarter. The decrease is primarily due to a decrease in the amount of home entertainment product sold and the number of significant titles released in the quarter. The amount of home entertainment product sold decreased due to the performance of the titles listed in the above table.

The titles listed above as contributing significant home entertainment revenue in the current quarter represented individually between 2% and 7% of total home entertainment revenue and, in the aggregate, 20%, or $18.8 million of total home entertainment revenue for the quarter. In the prior year’s quarter, the titles listed above as contributing significant home entertainment revenue represented individually between 3% and 12% of total home entertainment revenue and, in the aggregate, 30%, or $31.7 million of total home entertainment revenue for the quarter. In the current quarter, $75.8 million, or 80%, of total home entertainment revenue was contributed by titles that individually make up less than 2% of total home entertainment revenue, and in the prior year’s quarter this amounted to $75.7 million, or 70%, of total home entertainment revenue.

Television revenue included in motion pictures revenue of $39.0 million in this quarter increased $7.7 million, or 24.6%, compared to the prior year’s quarter. In this quarter, the titles listed above as contributing significant television revenue represented individually between 5% and 28% of total television revenue and, in the aggregate, 63% or $24.7 million of total television revenue for the quarter. In the prior year’s quarter, the titles listed above as contributing significant television revenue represented individually between 7% and 27% of total television revenue and, in the aggregate, 58%, or $18.2 million of total television revenue for the quarter. In the current quarter, $14.3 million, or 37%, of total television revenue was contributed by titles that individually make up less than 5% of total television revenue, and in the prior year’s quarter, this amounted to $13.1 million, or 42%, of total television revenue for the quarter.

International revenue of $41.1 million decreased $3.5 million, or 7.8%, in this quarter as compared to the prior year’s quarter. Lionsgate UK contributed $14.9 million, or 36.3% of international revenue in the current quarter, which included revenues from My Best Friend’s Girl, Saw IV, Saw V, The Bank Job, The Edge of Love, and The Forbidden Kingdom, compared to $22.4 million, or 50.2%, of total international revenue in the prior year’s quarter. In this quarter, the titles listed in the table above as contributing significant international revenue, excluding revenue generated from these titles by Lionsgate UK, represented individually between 3% and 19% of total international revenue and, in the aggregate, 43%, or $17.7 million, of total international revenue for the quarter. In the prior year’s quarter, the titles listed in the table above as contributing significant revenue represented individually between 4% and 11% of total international revenue and, in the aggregate, 31%, or $13.8 million, of total international revenue for the quarter.

Mandate Pictures revenue includes revenue from the sales and licensing of domestic and worldwide rights of titles developed or acquired by Mandate Pictures to third-party distributors or international sub-distributors. International revenue from Mandate Pictures titles is included in Mandate Pictures revenue in the table above. In the current quarter, the revenue from Mandate Pictures, acquired in September 2007, amounted to $8.3 million, as compared to $12.5 million in the prior year’s quarter. In this quarter, the titles listed in the table above as contributing significant Mandate Pictures revenue represented individually between 9% and 59% of total Mandate Pictures revenue and, in the aggregate, 88%, or $7.3 million, of total Mandate Pictures revenue for the quarter. In the prior year’s quarter, the titles listed in the table above as contributing significant Mandate Pictures revenue represented individually between 7% and 52% of total Mandate Pictures revenue and, in the aggregate, 94%, or $11.8 million, of total Mandate Pictures revenue for the quarter.

Television Revenue

The following table sets forth the components and the changes in the components of revenue that make up television production revenue for the three-month periods ended December 31, 2008 and 2007:


	Three Months		Three Months
	Ended		Ended
	December 31,		December 31,		Increase (Decrease)
	2008		2007		Amount			Percent
	(Amounts in millions)

Television Production
Domestic series licensing	$	56.8	$	21.7	$	35.1			161.8	%
Domestic television movies and miniseries		—		0.1		(0.1	)		(100.0	)%
International		5.4		8.9		(3.5	)		(39.3	)%
Home entertainment releases of television production		6.9		7.2		(0.3	)		(4.2	)%
Other		0.1		0.1		—			0.0	%

	$	69.2	$	38.0	$	31.2			82.1	%

Domestic series licensing revenue of $56.8 million increased by $35.1 million in the current quarter, compared to domestic series licensing revenue of $21.7 million in the prior year’s quarter, primarily due to an increase in television episodes delivered and from $14.5 million of revenue generated from the Company’s joint venture with Ish Entertainment, LLC (“Ish Entertainment”), which produced the domestic series Paris Hilton’s My New BFF and 50 Cent: The Money and the Power . In addition, revenues included in domestic series licensing from the Company’s television syndication subsidiary, Debmar-Mercury, LLC (“Debmar-Mercury”), increased $1.6 million to $12.1 million from $10.5 million in the prior year’s quarter. The following table sets forth the number of television episodes and hours delivered in the three months ended December 31, 2008 and 2007, respectively, excluding television episodes delivered by Debmar-Mercury:


		Three Months Ended						Three Months Ended
		December 31, 2008						December 31, 2007
		Episodes		Hours				Episodes		Hours

Crash TV Series Season 1	1hr		13		13.0	Mad Men Season 1	1hr		1		1.0
Mad Men Season 2	1hr		3		3.0	Wildfire Season 4	1hr		2		2.0
Scream Queens	1hr		8		8.0	Weeds Season 3	1/2hr		3		1.5

			24		24.0				6		4.5

In the three months ended December 31, 2008, the television episodes listed in the table above represented individually between 9% and 30% of domestic series revenue and, in the aggregate, 50%, or $28.4 million of total television revenue for the quarter. In the three months ended December 31, 2007, the television episodes listed above represented individually between 10% and 25% of domestic series revenue and, in the aggregate, 46%, or $9.9 million of total television revenue for the quarter.

International revenue of $5.4 million decreased by $3.5 million in the current quarter compared to international revenue of $8.9 million in the prior year’s quarter. International revenue in the current quarter includes revenue primarily from Mad Men Season 1 and Mad Men Season 2 , and international revenue in the prior year’s quarter includes revenue from The Dead Zone Season 1, Mad Men Season 1, and Weeds Season 2 .

Direct Operating Expenses

The following table sets forth direct operating expenses by segment for the three months ended December 31, 2008 and 2007:


	Three Months Ended									Three Months Ended
	December 31, 2008									December 31, 2007
	Motion									Motion
	Pictures			Television			Total			Pictures			Television			Total
	(Amounts in millions)

Direct operating expenses
Amortization of films and television programs	$	86.2		$	42.7		$	128.9		$	56.2		$	22.1		$	78.3
Participation and residual expense		75.6			11.1			86.7			50.9			10.5			61.4
Amortization of acquired intangible assets		0.2			—			0.2			0.4			—			0.4
Other expenses		2.6			0.3			2.9			0.4			(0.4	)		—

	$	164.6		$	54.1		$	218.7		$	107.9		$	32.2		$	140.1

Direct operating expenses as a percentage of segment revenues		64.6	%		78.2	%		67.5	%		41.3	%		84.7	%		46.9	%

Direct operating expenses of the motion pictures segment of $164.6 million for this quarter were 64.6% of motion pictures revenue, compared to $107.9 million, or 41.3%, of motion pictures revenue for the prior year’s quarter. The increase in direct operating expense of the motion pictures segment in the current quarter as a percent of revenue is due primarily to $22.6 million of charges for write-downs of investment in film and a $20.3 million participation reserve in connection with a home entertainment library distribution contract of family entertainment titles entered into in the current fiscal year, resulting from the actual and expected future underperformance of the titles in this library. In the prior year quarter, there were $5.1 million of write-downs of investment in film costs. In addition, the performance of the titles from the fiscal 2008 and 2009 theatrical releases in the current quarter as compared to the prior year’s quarter contributed to the increase in the percentage of direct operating expenses as a percent of revenue. In the current quarter, approximately $19.1 million of charges for write-downs of investment in film were due to the lower than anticipated performance of three titles that have not yet been released, and $2.8 million of write-downs is a result of the decrease in value of a library acquired during the acquisition of Mandate Pictures due to the underperformance of those titles. In the prior year’s quarter, approximately $4.2 million of the write down related to one motion picture.

Direct operating expenses of the television segment of $54.1 million for this quarter were 78.2% of television revenue, compared to $32.2 million, or 84.7%, of television revenue for the prior year’s quarter. The increase in direct operating expense of the television segment in the quarter is due to higher television production revenue. The decrease in direct operating expenses of the television segment in the current quarter as a percent of revenue is due to a greater portion of revenue attributed to more successful shows, such as Weeds, House of Payne and Mad Men . In the current quarter, $3.1 million of write-downs of investment in film costs was included in amortization of television programs, compared to $3.3 million in the prior year’s quarter, both associated with a respective television series.

Distribution and Marketing Expenses

The following table sets forth distribution and marketing expenses by segment for the three months ended December 31, 2008 and 2007:


	Three Months Ended						Three Months Ended
	December 31, 2008						December 31, 2007
	Motion						Motion
	Pictures		Television		Total		Pictures		Television		Total
	(Amounts in millions)

Distribution and marketing expenses
Theatrical	$	104.0	$	—	$	104.0	$	50.4	$	—	$	50.4
Home Entertainment		42.4		1.9		44.3		47.8		2.4		50.2
Television		1.0		2.7		3.7		0.6		1.1		1.7
International		16.4		0.9		17.3		16.3		1.0		17.3
Other		1.0		0.1		1.1		0.2		—		0.2

	$	164.8	$	5.6	$	170.4	$	115.3	$	4.5	$	119.8

The majority of distribution and marketing expenses relate to the motion pictures segment. Theatrical prints and advertising (“P&A”) in the motion pictures segment in the current quarter of $104.0 million increased $53.6 million, or 106.3%, compared to $50.4 million in the prior year’s quarter. Domestic theatrical P&A from the motion pictures segment in this quarter included P&A incurred on the release of My Bloody Valentine 3-D, Punisher: War Zone, Saw V, Transporter III, and The Spirit, which individually represented between 9% and 27% of total theatrical P&A and, in the aggregate, accounted for 92% of the total theatrical P&A. My Bloody Valentine 3-D was released subsequent to December 31, 2008, on January 16, 2009 and therefore, did not have significant revenue for the current quarter. Domestic theatrical P&A from the motion pictures segment in the prior year’s quarter included P&A incurred on the release of titles such as 3:10 to Yuma, Rambo, Saw IV, The Eye, and Why Did I Get Married? , which individually represented between 7% and 45% of total theatrical P&A and, in the aggregate, accounted for 97% of the total theatrical P&A. In the prior year’s quarter, theatrical P&A incurred on Rambo and The Eye represented a combined 15% of total theatrical P&A; however, the titles did not have significant revenue for the quarter as they were released subsequent to December 31, 2007, on January 25, 2008 and February 1, 2008, respectively.

Home entertainment distribution and marketing costs on motion pictures and television product in this quarter of $44.3 million decreased $5.9 million, or 11.8%, compared to $50.2 million in the prior year’s quarter. The decrease in home entertainment distribution and marketing costs is mainly due to the decrease in revenue in the current quarter compared to the prior year’s quarter. Home entertainment distribution and marketing costs as a percentage of home entertainment revenues was 43.6% and 43.8% in the current quarter and prior year’s quarter, respectively.

International distribution and marketing expenses in this quarter includes $14.6 million of distribution and marketing costs from Lionsgate UK, compared to $14.4 million in the prior year’s quarter.

General and Administrative Expenses

The following table sets forth general and administrative expenses by segment for the three months ended December 31, 2008 and 2007:


	Three Months			Three Months
	Ended			Ended
	December 31,			December 31,			Increase (Decrease)
	2008			2007			Amount			Percent
	(Amounts in millions)

General and Administrative Expenses
Motion Pictures	$	11.6		$	11.0		$	0.6			5.5	%
Television		3.1			1.7			1.4			82.4	%
Corporate		12.8			14.8			(2.0	)		(13.5	)%

	$	27.5		$	27.5		$	—			—

General and administrative expenses as a percentage of revenue		8.5	%		9.2	%

The increase in general and administrative expenses of the motion pictures segment of $0.6 million, or 5.5%, is primarily due to increases in salaries and related expenses, increases in general and administrative expenses associated with our recent acquisitions, offset by decreases in other overhead costs and by increased capitalized film production costs that are directly attributable to motion picture productions. The following table sets forth the change in general and administrative expenses for the motion pictures reporting segment for the three months ended December 31, 2008 and 2007:


	Three Months			Three Months
	Ended			Ended
	December 31,			December 31,			Increase
	2008			2007			(Decrease)
	(Amounts in millions)

General and Administrative Expenses Motion Pictures
Mandate Pictures (acquired September 2007)	$	1.4		$	1.2		$	0.2
Maple Pictures (consolidated July 2007)		1.0			0.9			0.1
Lionsgate UK		1.4			1.2			0.2
Salaries and related expenses		7.6			6.1			1.5
Other overhead		2.3			2.5			(0.2	)
Capitalized film production costs		(2.1	)		(0.9	)		(1.2	)

	$	11.6		$	11.0		$	0.6

Capitalized film production costs, which increased $1.2 million in the current quarter compared to the prior year’s quarter, consisted of an increase of $0.7 million of film production costs associated with pictures produced by Mandate Pictures and the remaining $0.5 million was from increases in other salaries and related expenses and other general overhead costs directly attributable to motion picture productions.

The increase in general and administrative expenses of the television segment of $1.4 million is due to general and administrative expense increases related to our Debmar-Mercury subsidiary of $0.3 million, additional costs associated with the start up of our Asian television venture of $0.7 million, and increases in other general overhead costs. In the current quarter, $1.7 million of television production overhead was capitalized of which $0.5 million was associated with productions of our new reality television venture compared to $0.9 million in the prior year’s quarter.

The decrease in corporate general and administrative expenses of $2.0 million, or 13.5%, is primarily due to a decrease in salaries and related expenses of approximately $1.3 million, a decrease in stock-based compensation of approximately $1.0 million, a decrease in professional fees of approximately $0.1 million, offset by an increase in other general overhead costs of $0.4 million primarily related to rents and facility expenses.

The following table sets forth stock based compensation expense (benefit) for the three months ended December 31, 2008 and 2007:


	Three Months			Three Months
	Ended			Ended
	December 31,			December 31,			Increase (Decrease)
	2008			2007			Amount			Percent
	(Amounts in millions)

Stock Based Compensation Expense (Benefit):
Stock options	$	0.8		$	0.9		$	(0.1	)		(11.1	)%
Restricted share units		3.3			2.4			0.9			37.5	%
Stock appreciation rights		(2.7	)		(0.9	)		(1.8	)		200.0	%

	$	1.4		$	2.4		$	(1.0	)		(41.7	)%

At December 31, 2008, as disclosed in Note 13 to the unaudited condensed consolidated financial statements, there were unrecognized compensation costs of approximately $23.9 million related to stock options and restricted share units previously granted, including annual installments of share grants that were subject to performance targets, which will be expensed over the remaining vesting periods. At December 31, 2008, 1,056,548 shares of restricted share units have been awarded to four key executive officers, the vesting of which will be subject to performance targets to be set annually by the Compensation Committee of the Board of Directors of the Company. These restricted share units will vest in three, four, and five annual installments assuming annual performance targets have been met. The fair value of the 1,056,548 shares whose future annual performance targets have not been set was $5.8 million, based on the market price of the Company’s common shares as of December 31, 2008. The market value will be remeasured when the annual performance criteria are set and the value will be expensed over the remaining vesting periods once it becomes probable that the performance targets will be satisfied.

Depreciation and Other Expenses (Income)

Depreciation of $1.4 million this quarter increased $0.4 million, or 40.0%, from $1.0 million in the prior year’s quarter.

Interest expense of $4.3 million this quarter increased $0.2 million, or 4.9%, from $4.1 million in the prior year’s quarter.

Interest and other income was $0.9 million this quarter, compared to $2.5 million in the prior year’s quarter. Interest and other income this quarter was earned on the cash balance and restricted investments held during the three months ended December 31, 2008.

Gain on sale of equity securities was nil this quarter, compared to $0.1 million in the prior year’s quarter primarily from the sale of shares in Magna Pacific Holdings (“Magna”), an Australian film distributor.

Gain on extinguishment of debt was $3.5 million for the current quarter, resulting from the repurchase of $9.0 million of the 3.625% Notes, compared to nil in the prior year’s quarter.

The Company’s equity interests in this quarter included a $1.4 million loss from the Company’s 33.33% equity interest in FEARnet, a loss of $0.2 million from the Company’s 42% equity interest in Break.com, income of $0.1 million from the Company’s 43% equity interest in Roadside, and a $0.2 million loss from the Company’s 28.57% equity interest in EPIX. For the three months ended December 31, 2007, equity interests included a $1.3 million loss from the Company’s 33.33% equity interest in FEARnet, income of less than $0.1 million from the Company’s 42% equity interest in Break.com, a less than $0.1 million loss from the Company’s 43% equity interest in Roadside, and income of less than $0.1 million from the Company’s 50% equity interest in Elevation.

The Company had an income tax benefit of $2.0 million, or 2.1% of loss before income taxes in the three months ended December 31, 2008, compared to an expense of $0.6 million, or 7.9% of income before income taxes in the three months ended December 31, 2007. The tax benefit reflected in the current quarter is primarily attributable to U.S. and Canadian income taxes and foreign withholding taxes. The Company’s actual annual

effective tax rate will differ from the statutory federal rate as a result of several factors, including changes in the valuation allowance against net deferred tax assets, non-temporary differences, foreign income taxed at different rates, and state and local income taxes. Income tax loss carryforwards amount to approximately $70.8 million for U.S. federal income tax purposes available to reduce income taxes over twenty years, $46.2 million for U.S. state income tax purposes available to reduce income taxes over future years with varying expirations, $21.6 million for Canadian income tax purposes available to reduce income taxes over 19 years with varying expirations, and $19.8 million for UK income tax purposes available indefinitely to reduce future income taxes.

Net loss for the three months ended December 31, 2008 was $93.4 million, or basic and diluted net loss per common share of $0.81 on 115.8 million weighted average shares outstanding. This compares to net income for the three months ended December 31, 2007 of $7.3 million or basic net income per common share of $0.06 on 118.9 million weighted average common shares outstanding. Diluted net income per common share for the three months ended December 31, 2007 was $0.06 on 120.3 million weighted average common shares outstanding.

Nine Months Ended December 31, 2008 Compared to Nine Months Ended December 31, 2007

Consolidated revenues for the nine months ended December 31, 2008 of $1.0 billion increased $153.7 million, or 18.1%, compared to $849.5 million in the nine months ended December 31, 2007. Motion pictures revenue of $824.4 million for the current nine-month period increased $151.0 million, or 22.4%, compared to $673.4 million in the prior year’s period. Television revenues of $178.8 million this period increased $2.7 million, or 1.5%, compared to $176.1 million in the prior year’s period.

Our largest component of revenue comes from home entertainment. The following table sets forth total home entertainment revenue for both the Motion Pictures and Television Production reporting segments for the nine-month periods ended December 31, 2008 and 2007:


	Nine Months		Nine Months
	Ended		Ended
	December 31,		December 31,		Increase (Decrease)
	2008		2007		Amount		Percent
	(Amounts in millions)

Home Entertainment Revenue
Motion Picture	$	411.0	$	337.9	$	73.1		21.6	%
Television Production		29.0		17.8		11.2		62.9	%

	$	440.0	$	355.7	$	84.3		23.7	%

Motion Pictures Revenue

The increase in motion pictures revenue this period was mainly attributable to increases in home entertainment, television, Mandate Pictures and, to a lesser extent, increases in theatrical and international revenue. The following table sets forth the components of revenue for the motion pictures reporting segment for the nine-month periods ended December 31, 2008 and 2007:


	Nine Months		Nine Months
	Ended		Ended
	December 31,		December 31,		Increase (Decrease)
	2008		2007		Amount		Percent
	(Amounts in millions)

Motion Pictures
Theatrical	$	133.9	$	128.1	$	5.8		4.5	%
Home Entertainment		411.0		337.9		73.1		21.6	%
Television		129.8		91.3		38.5		42.2	%
International		103.9		98.3		5.6		5.7	%
Mandate Pictures		38.0		12.7		25.3		199.2	%
Other		7.8		5.1		2.7		52.9	%

	$	824.4	$	673.4	$	151.0		22.4	%

The following table sets forth the titles contributing significant motion pictures revenue for the nine-month periods ended December 31, 2008 and 2007:


Nine Months Ended December 31,
2008		2007
	Theatrical and DVD		Theatrical and DVD
Title	Release Date	Title	Release Date

Theatrical:		Theatrical:
My Best Friend’s Girl	September 2008	3:10 to Yuma	September 2007
Saw V	October 2008	Good Luck Chuck	September 2007
The Family That Preys	September 2008	Hostel II	June 2007
The Forbidden Kingdom	April 2008	Saw IV	October 2007
Transporter III	November 2008	War	August 2007
W.	October 2008	Why Did I Get Married? — Feature	October 2007
Home Entertainment:		Home Entertainment:
Meet The Browns	July 2008	Bratz: The Movie	November 2007
Rambo	May 2008	Bug	September 2007
The Bank Job	July 2008	Daddy’s Little Girls	June 2007
The Eye	June 2008	Delta Farce	September 2007
The Forbidden Kingdom	September 2008	Happily N’Ever After	May 2007
Witless Protection	June 2008	Pride	June 2007
		The Condemned	September 2007


Television:		Television:
3:10 to Yuma		Crank
Good Luck Chuck		Daddy’s Little Girls
Rambo		Employee of the Month
Saw IV		Happily N’Ever After
The Eye		Saw III
War		The Descent
Why Did I Get Married? — Feature
International:		International:
My Best Friend’s Girl		Good Luck Chuck
Punisher: War Zone		Saw III
Saw IV		Saw IV
Saw V		War
The Eye
War
Mandate Pictures:		Mandate Pictures:
30 Days of Night		30 Days of Night
Harold & Kumar Escape from Guantanamo Bay		Juno
Juno		Mr. Magorium’s Wonder Emporium
Nick and Norah’s Infinite Playlist		The Boogeyman II
Passengers

Theatrical revenue of $133.9 million increased $5.8 million, or 4.5%, in this period as compared to the prior year’s period. In the current nine-month period, the titles listed in the above table as contributing significant theatrical revenue represented individually between 6% and 20% of total theatrical revenue and, in the aggregate, approximately 75%, or $100.4 million of total theatrical revenue. In the prior year’s period, the titles listed in the above table as contributing significant theatrical revenue represented individually between 6% and 23% of total theatrical revenue and, in the aggregate, approximately 86%, or $110.5 million of total theatrical revenue.

Home entertainment revenue of $411.0 million increased $73.1 million, or 21.6%, in this period as compared to the prior year’s period. The amount of home entertainment product sold increased due to the performance of the titles listed in the above table and to a lesser extent titles not listed above. The titles listed above as contributing significant home entertainment revenue in the current period represented individually between 4% and 11% of total home entertainment revenue and, in the aggregate, 40%, or $162.8 million of total home entertainment revenue for the period. In the prior year’s period, the titles listed above as contributing significant home entertainment revenue represented individually between 2% and 7% of total home entertainment revenue and, in the aggregate, 32%, or $109.1 million of total home entertainment revenue for the period. In the current period, $248.3 million, or 60%, of total home entertainment revenue was contributed by titles that individually make up less than 2% of total home entertainment revenue, and in the prior year’s period this amounted to $228.9 million, or 68%, of total home entertainment revenue.

Television revenue included in motion pictures revenue of $129.8 million in this period increased $38.5 million, or 42.2%, compared to the prior year’s period. In the current nine-month period, the titles listed above as contributing significant television revenue represented individually between 5% and 11% of total television revenue and, in the aggregate, 63% or $81.7 million of total television revenue for the period. In the prior year’s period, the titles listed above as contributing significant television revenue represented individually between 6% and 15% of total television revenue and, in the aggregate, 61%, or $55.7 million of total television revenue for the period. In the current period, $48.1 million, or 37%, of total television revenue was contributed by titles that individually make up less than 5% of total television revenue, and in the prior year’s period, this amounted to $35.6 million, or 39%, of total television revenue for the period.

International revenue of $103.9 million increased $5.6 million, or 5.7%, in the current nine-month period as compared to the prior year’s period. Lionsgate UK contributed $42.5 million, or 40.9% of international revenue in the current period, which included revenues from 3:10 to Yuma, The Bank Job, The Eye, The Forbidden Kingdom, Saw IV and Saw V, compared to $37.3 million, or 37.9%, of total international revenue in the prior year’s period. In this period, the titles listed in the table above as contributing significant international revenue, excluding revenue generated from these titles by Lionsgate UK, represented individually between 2% and 8% of total international revenue and, in the aggregate, 31%, or $32.5 million, of total international revenue for the period. In the prior year’s period, the titles listed in the table above as contributing significant revenue represented individually between 3% and 8% of total international revenue and, in the aggregate, 24%, or $23.2 million, of total international revenue for the period.

Mandate Pictures revenue includes revenue from the sales and licensing of domestic and worldwide rights of titles developed or acquired by Mandate Pictures to third-party distributors or international sub-distributors. International revenue from Mandate Pictures titles is included in the Mandate Pictures revenue in the table above. In the current nine-month period, revenue from Mandate Pictures, acquired in September 2007, amounted to $38.0 million, as compared to $12.7 million in the prior year’s period. In this period, the titles listed in the table above as contributing significant Mandate Pictures revenue represented individually between 6% and 36% of total Mandate Pictures revenue and, in the aggregate, 88%, or $33.5 million, of total Mandate Pictures revenue for the period. In the prior year’s period, the titles listed in the table above as contributing significant Mandate Pictures revenue represented individually between 7% and 52% of total Mandate Pictures revenue and, in the aggregate, 94%, or $11.9 million, of total Mandate Pictures revenue for the period.

Television Revenue

The following table sets forth the components and the changes in the components of revenue that make up television production revenue for the nine-month periods ended December 31, 2008 and 2007:


	Nine Months		Nine Months
	Ended		Ended
	December 31,		December 31,		Increase (Decrease)
	2008		2007		Amount			Percent
	(Amounts in millions)

Domestic series licensing	$	133.1	$	117.6	$	15.5			13.2	%
Domestic television movies and miniseries		—		15.9		(15.9	)		(100.0	)%
International		16.2		24.4		(8.2	)		(33.6	)%
Home entertainment releases of television production		29.0		17.8		11.2			62.9	%
Other		0.5		0.4		0.1			25.0	%

	$	178.8	$	176.1	$	2.7			1.5	%

Domestic series licensing revenue of $133.1 million increased by $15.5 million in the current period compared to domestic series licensing revenue of $117.6 million in the prior year’s period, primarily due to $15.6 million of revenue generated from the Company’s joint venture with Ish Entertainment, which produced the domestic series Paris Hilton’s My New BFF and 50 Cent: The Money and the Power . In addition, revenues included in domestic series licensing from Debmar-Mercury increased $1.5 million to $38.1 million from $36.6 million in the prior year’s period primarily due to increased revenue from the television series, Family Feud . The following table

sets forth the number of television episodes and hours delivered in the nine months ended December 31, 2008 and 2007, respectively, excluding television episodes delivered by Debmar-Mercury:


		Nine Months Ended
		December 31, 2008						Nine Months Ended December 31, 2007
		Episodes		Hours				Episodes		Hours

Fear Itself	1hr		13		13.0	The Dead Zone Season 5	1hr		13		13.0
Mad Men Season 2	1hr		13		13.0	The Dresden Files	1hr		2		2.0
Crash TV Series Season 1	1hr		13		13.0	Mad Men Season 1	1hr		12		12.0
Scream Queens	1hr		8		8.0	Wildfire Season 4	1hr		13		13.0
Weeds Season 4	1/2hr		13		6.5	Weeds Season 3	1/2hr		15		7.5

			60		53.5				55		47.5

In the nine months ended December 31, 2008, the television episodes listed in the table above represented individually between 4% and 20% of domestic series revenue and, in the aggregate, 58%, or $76.7 million of total television revenue for the period. In the nine months ended December 31, 2007, the television episodes listed above represented individually between 2% and 20% of domestic series revenue and, in the aggregate, 65%, or $76.6 million of total television revenue for the period.

Domestic television movies and miniseries revenue decreased by $15.9 million in the current period primarily because there were no deliveries in the current period, as compared to the delivery of eight episodes of the miniseries The Kill Point in the prior year’s period.

International revenue of $16.2 million decreased by $8.2 million in the current period, compared to international revenue of $24.4 million in the prior year’s period. International revenue in the current period includes revenue from Mad Men Seasons 1 and 2, Weeds Season 3, Wildfire Season 4, and The Kill Point , and international revenue in the prior year’s period includes revenue from Hidden Palms, Lovespring International, The Dresden Files , The Dead Zone Season 1 and Season 5, The Lost Room, Weeds Seasons 1 and 2, and Wildfire Season 3 .

The increase in revenue from home entertainment releases of television production is primarily driven by DVD revenue from Weeds Season 3 and Mad Men Season 1.

Direct Operating Expenses

The following table sets forth direct operating expenses by segment for the nine months ended December 31, 2008 and 2007:


	Nine Months Ended									Nine Months Ended
	December 31, 2008									December 31, 2007
	Motion									Motion
	Pictures			Television			Total			Pictures			Television			Total
	(Amounts in millions)

Direct operating expenses
Amortization of films and television programs	$	206.4		$	109.2		$	315.6		$	130.8		$	124.3		$	255.1
Participation and residual expense		212.4			33.3			245.7			122.5			33.5			156.0
Amortization of acquired intangible assets		0.8			—			0.8			0.7			—			0.7
Other expenses		3.5			0.9			4.4			(0.3	)		(0.1	)		(0.4	)

	$	423.1		$	143.4		$	566.5		$	253.7		$	157.7		$	411.4

Direct operating expenses as a percentage of segment revenues		51.3	%		80.2	%		56.5	%		37.7	%		89.6	%		48.4	%

Direct operating expenses of the motion pictures segment of $423.1 million for this period were 51.3% of motion pictures revenue, compared to $253.7 million, or 37.7%, of motion pictures revenue for the prior year’s period. The increase in direct operating expense of the motion pictures segment in the current period as a percent of

revenue is due primarily to $28.9 million of charges for write-downs of investment in film and a $20.3 million participation reserve in connection with a home entertainment library distribution contract of family entertainment titles entered into in the current fiscal year, resulting from the actual and expected future underperformance of the titles in this library. In the prior year period, there were $11.8 million of write-downs of investment in film costs. In addition, the performance of the titles from the fiscal 2008 and 2009 theatrical releases in the current period as compared to the prior year’s period contributed to the increase in the percentage of direct operating expenses as a percent of revenue. In the current period, approximately $23.3 million of charges for write-downs of investment in film were due to the lower than anticipated performance of four titles that have not yet been released, and $2.8 million of write-downs is a result of the decrease in value of a library acquired during the acquisition of Mandate Pictures due to the underperformance of those titles. In the prior year’s period, approximately $4.2 million of the write down related to one motion picture.

Direct operating expenses of the television segment of $143.4 million for this period were 80.2% of television revenue, compared to $157.7 million, or 89.6%, of television revenue for the prior year’s period. The decrease in direct operating expense and the decrease in the percent of revenue of direct operating expense of the television segment in the period are due to a greater portion of revenue attributed to more successful shows, such as Weeds, House of Payne and Mad Men . In the current period, $7.1 million of charges for costs incurred in excess of contracted revenues for episodic television series or write-downs of investment in film costs was included in amortization of television programs, compared to $6.2 million in the prior year’s period. Included in the charges in the current period is a write-down of $3.1 million of film costs compared to a write-off of $3.3 million of film costs in the prior year’s period, both associated with a respective television series.

Distribution and Marketing Expenses

The following table sets forth distribution and marketing expenses by segment for the nine months ended December 31, 2008 and 2007:


	Nine Months Ended						Nine Months Ended
	December 31, 2008						December 31, 2007
	Motion						Motion
	Pictures		Television		Total		Pictures		Television		Total
	(Amounts in millions)

Distribution and marketing expenses
Theatrical	$	235.3	$	—	$	235.3	$	261.8	$	—	$	261.8
Home Entertainment		166.1		8.5		174.6		142.5		5.9		148.4
Television		3.5		5.2		8.7		1.7		2.6		4.3
International		34.9		3.0		37.9		34.6		3.0		37.6
Other		1.9		0.4		2.3		0.3		0.1		0.4

	$	441.7	$	17.1	$	458.8	$	440.9	$	11.6	$	452.5

The majority of distribution and marketing expenses relate to the motion pictures segment. Theatrical P&A in the motion pictures segment in the current period of $235.3 million decreased $26.5 million, or 10.1%, compared to $261.8 million in the prior year’s period. The decrease in theatrical P&A from the motion pictures segment is primarily due to a change in the mix of titles released during the period. Domestic theatrical P&A from the motion pictures segment this period included P&A incurred on the release of Bangkok Dangerous, Disaster Movie, My Best Friend’s Girl, Punisher: War Zone, Saw V, The Family That Preys,The Forbidden Kingdom, The Spirit, and Transporter III , which individually represented between 6% and 12% of total theatrical P&A and in the aggregate accounted for 87% of the total theatrical P&A. Bangkok Dangerous, Disaster Movie, Punisher: War Zone and The Spirit individually represented between 9% and 11% of total theatrical P&A, and in the aggregate, accounted for 39% of total theatrical P&A, and each contributed less than 5% of total theatrical revenue, and in the aggregate, contributed less than 16% of total theatrical revenue. Domestic theatrical P&A from the motion pictures segment in the prior year’s period included P&A incurred on the release of titles such as Bug, 3:10 to Yuma, Bratz: The Movie, Hostel II, Good Luck Chuck, Saw IV, War, Why Did I Get Married?, Delta Farce, The Condemned and Slow Burn , which individually represented between 4% and 15% of total theatrical P&A and in the aggregate accounted for

89% of the total theatrical P&A. In the prior year’s period, Bug, Bratz: The Movie, Delta Farce, The Condemned and Slow Burn individually represented between 4% and 9% of total theatrical P&A and, in the aggregate, accounted for 28% of total theatrical P&A, and each contributed less than 3% of total theatrical revenue and, in the aggregate, contributed less than 10% of total theatrical revenue.

Home entertainment distribution and marketing costs on motion pictures and television product in this period of $174.6 million increased $26.2 million, or 17.7%, compared to $148.4 million in the prior year’s period. The increase in home entertainment distribution and marketing costs is mainly due to the increase in revenue in the current period compared to the prior year’s period.

Home entertainment distribution and marketing costs as a percentage of home entertainment revenues was 39.7% and 41.7% in the current period and prior year’s period, respectively.

International distribution and marketing expenses in this period includes $31.2 million of distribution and marketing costs from Lionsgate UK, compared to $29.2 million in the prior year’s period.

General and Administrative Expenses

The following table sets forth general and administrative expenses by segment for the nine months ended December 31, 2008 and 2007:


	Nine Months			Nine Months
	Ended			Ended
	December 31,			December 31,			Increase (Decrease)
	2008			2007			Amount		Percent
	(Amounts in millions)

General and Administrative Expenses
Motion Pictures	$	36.5		$	29.5		$	7.0		23.7	%
Television		8.5			4.6			3.9		84.8	%
Corporate		51.4			46.6			4.8		10.3	%

	$	96.4		$	80.7		$	15.7		19.5	%

General and administrative expenses as a percentage of revenue		9.6	%		9.5	%

The increase in general and administrative expenses of the motion pictures segment of $7.0 million, or 23.7%, is primarily due to an increase in general and administrative expenses associated with our recent acquisitions, increases in salaries and related expenses and increases in other overhead costs primarily related to rents and facility expenses, offset by capitalized film production costs that are directly attributable to motion picture productions. The following table sets forth the change in general and administrative expenses for the motion picture reporting segment for the nine months ended December 31, 2008 and 2007:


	Nine Months			Nine Months
	Ended			Ended
	December 31,			December 31,			Increase
	2008			2007			(Decrease)
	(Amounts in millions)

General and Administrative Expenses Motion Pictures
Mandate Pictures (acquired September 2007)	$	4.2		$	1.4		$	2.8
Maple Pictures (consolidated July 2007)		3.4			1.4			2.0
Lions Gate UK		4.5			3.6			0.9
Salaries and related expenses		21.5			18.2			3.3
Other overhead		8.5			7.0			1.5
Capitalized film production costs		(5.6	)		(2.1	)		(3.5	)

	$	36.5		$	29.5		$	7.0

Capitalized film production costs, which increased $3.5 million in the current period compared to the prior year’s period, consisted of an increase of $2.2 million of film production costs associated with pictures produced by Mandate Pictures and the remaining $1.3 million was from other salaries and related expenses, and other general overhead cost increases directly attributable to motion picture productions.

The increase in general and administrative expenses of the television segment of $3.9 million, is due to other general and administrative expense increases related to our Debmar-Mercury subsidiary of $1.1 million, additional costs associated with the start up of our Asian television venture of $1.5 million and an increase in other general overhead costs primarily related to salaries and related expenses and rents and facility expenses. In the current period, $4.6 million of television production overhead was capitalized of which $1.3 million was associated with productions of our new reality television venture compared to $3.0 million in the prior year’s period.

The increase in corporate general and administrative expenses of $4.8 million, or 10.3%, is primarily due to an increase in salaries and related expenses of approximately $4.7 million, an increase in stock-based compensation of approximately $0.1 million, an increase in other general overhead costs primarily related to rents and facility expenses of $2.2 million, offset by a decrease in transactional and consulting related professional fees of approximately $2.2 million. The increase in salaries and related expenses of $4.7 million was partly due to higher salaries and increases in the number of full-time employees.

The following table sets forth stock based compensation expense (benefit) for the nine months ended December 31, 2008 and 2007:


	Nine Months			Nine Months
	Ended			Ended
	December 31,			December 31,			Increase (Decrease)
	2008			2007			Amount			Percent
	(Amounts in millions)

Stock Based Compensation Expense (Benefit):
Stock options	$	2.4		$	2.5		$	(0.1	)		(4.0	)%
Restricted share units		9.2			7.6			1.6			21.1	%
Stock appreciation rights		(3.3	)		(1.9	)		(1.4	)		73.7	%

	$	8.3		$	8.2		$	0.1			1.2	%

Depreciation and Other Expenses (Income)

Depreciation of $3.6 million this period increased $0.7 million, or 24.1%, from $2.9 million in the prior year’s period.

Interest expense of $13.8 million this period increased $1.6 million, or 13.1%, from $12.2 million in the prior year’s period.

Interest and other income was $5.1 million this period, compared to $8.9 million in the prior year’s period. Interest and other income this period was earned on the cash balance and restricted investments held during the nine months ended December 31, 2008.

Gain on sale of equity securities was nil for the current nine-month period, compared to $2.9 million in the prior year’s period primarily from the sale of shares in Magna, an Australian film distributor.

Gain on extinguishment of debt was $3.5 million for the current nine-month period, resulting from the repurchase of $9.0 million of the 3.625% Notes, compared to nil in the prior year’s period.

The Company’s equity interests in this period included a $3.8 million loss from the Company’s 33.33% equity interest in FEARnet, a loss of $1.4 million from the Company’s 42% equity interest in Break.com, a $0.2 million loss from the Company’s 43% equity interest in Roadside, and a $0.5 million loss from the Company’s 28.57% equity interest in EPIX. For the nine months ended December 31, 2007, equity interests included a $3.2 million loss from the Company’s 33.33% equity interest in FEARnet, a $0.1 million loss from the Company’s 10% equity interest in Maple Pictures, income of less than $0.1 million from the Company’s 42% equity interest in Break.com, a loss of less than $0.1 from the Company’s 43% equity interest in Roadside, and income of less than $0.1 from the Company’s 50% equity interest in Elevation.

The Company had an income tax expense of $1.3 million, or (1.0%) of loss before income taxes in the nine months ended December 31, 2008, compared to an expense of $2.1 million, or (2.1%) of loss before income taxes in the nine months ended December 31, 2007. The tax expense reflected in the current period is primarily attributable to U.S. and Canadian income taxes and foreign withholding taxes. The Company’s actual annual effective tax rate will differ from the statutory federal rate as a result of several factors, including changes in the valuation allowance against net deferred tax assets, non-temporary differences, foreign income taxed at different rates, and state and local income taxes. Income tax loss carryforwards, subject to certain limitations that may prevent the Company from fully utilizing them, amount to approximately $70.8 million for U.S. federal income tax purposes available to reduce income taxes over twenty years, $46.2 million for U.S. state income tax purposes available to reduce income taxes over future years with varying expirations, $21.6 million for Canadian income tax purposes available to reduce income taxes over 19 years with varying expirations, and $19.8 million for UK income tax purposes available indefinitely to reduce future income taxes.

Net loss for the nine months ended December 31, 2008 was $134.4 million, or basic and diluted net loss per common share of $1.15 on 117.0 million weighted average shares outstanding. This compares to net loss for the nine months ended December 31, 2007 of $103.8 million or basic and diluted net loss per common share of $0.88 on 118.4 million weighted average common shares outstanding.

Liquidity and Capital Resources

Our liquidity and capital resources are provided principally through cash generated from operations, issuance of subordinated notes and our credit facility.

In October 2004, LGEI sold $150.0 million of the 2.9375% Notes that mature on October 15, 2024. The Company received $146.0 million of net proceeds after paying placement agents’ fees from the sale of the 2.9375% Notes. Offering expenses were $0.7 million. The 2.9375% Notes are convertible at the option of the holder, at any time prior to maturity, upon satisfaction of certain conversion contingencies, into common shares of the Company at a conversion rate of 86.9565 shares per $1,000 principal amount of the 2.9375% Notes, which is equal to a conversion price of approximately $11.50 per share, subject to adjustment upon certain events. From October 15, 2009 to October 14, 2010, LGEI may redeem the 2.9375% Notes at 100.839%; from October 15, 2010 to October 14, 2011, LGEI may redeem the 2.9375% Notes at 100.420%; and thereafter, LGEI may redeem the notes at 100%.

In February 2005, LGEI sold $175.0 million of the 3.625% Notes that mature on March 15, 2025. The Company received $170.2 million of net proceeds after paying placement agents’ fees from the sale of the 3.625% Notes. Offering expenses were approximately $0.6 million. The 3.625% Notes are convertible at the option of the holder, at any time prior to maturity, into common shares of the Company at a conversion rate of 70.0133 shares per $1,000 principal amount of the 3.625% Notes, which is equal to a conversion price of approximately $14.28 per share, subject to adjustment upon certain events. LGEI may redeem the 3.625% Notes at its option on or after March 15, 2012 at 100% of their principal amount plus accrued and unpaid interest.

Amended Credit Facility. In July 2008, the Company entered into an amended credit facility which provides for a $340 million secured revolving credit facility, of which $30 million may be utilized by two of the Company’s wholly owned foreign subsidiaries. The amended credit facility expires July 25, 2013 and bears interest at 2.25% over the “Adjusted LIBOR” rate. At December 31, 2008, the Company had no borrowings (March 31, 2008 — nil) under the credit facility. The availability of funds under the credit facility is limited by a borrowing base and also reduced by outstanding letters of credit, which amounted to $22.7 million at December 31, 2008. At December 31, 2008, there was $317.3 million available under the amended credit facility. The Company is required to pay a monthly commitment fee based upon 0.50% per annum on the total credit facility of $340 million less the amount drawn. This amended credit facility amends and restates the Company’s original $215 million credit facility. Obligations under the credit facility are secured by collateral (as defined) granted by the Company and certain subsidiaries of the Company, as well as a pledge of equity interests in certain of the Company’s subsidiaries. The amended credit facility contains a number of affirmative and negative covenants that, among other things, require the Company to satisfy certain financial covenants and restrict the ability of the Company to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, enter into sale-leaseback transactions, transfer and sell material assets and merge or consolidate.

Theatrical Slate Participation. On May 25, 2007, the Company closed a theatrical slate participation arrangement, as amended on January 30, 2008. Under this arrangement, Pride Pictures, LLC (“Pride”), an unrelated entity, would participate in, generally, 50% of the Company’s production, acquisition, marketing and distribution costs of theatrical feature films up to an aggregate of approximately $196 million, net of transaction costs. The funds available from Pride were generated from the issuance by Pride of $35 million of subordinated debt instruments, $35 million of equity and $134 million from a senior revolving credit facility, which is subject to a borrowing base. The borrowing base calculation is generally based on 90% of the estimated ultimate amounts due to Pride on previously released films, as defined in the applicable agreements. The Company was not a party to the Pride debt obligations or their senior credit facility, and provided no guarantee of repayment of these obligations. The percentage of the contribution varied on certain pictures. Pride participated in a pro rata portion of the pictures’ net profits or losses similar to a co-production arrangement based on the portion of costs funded. The Company continued to distribute the pictures covered by the arrangement with a portion of net profits after all costs and the Company’s distribution fee being distributed to Pride based on their pro rata contribution to the applicable costs similar to a back-end participation on a film. The administrative agent for Pride’s senior lenders under the senior credit facility has taken the position that the senior lenders no longer have an obligation to continue to fund under the senior credit facility because the conditions precedent to funding set forth in the senior credit facility cannot be satisfied. The representative for the Pride equity and the Pride mezzanine investors have not yet taken a position as to the validity of the administrative agent’s assertion, and until this is resolved, all parties have reserved their respective rights. As a consequence, Pride did not purchase the pictures The Spirit or My Bloody Valentine 3-D and it is unknown whether Pride will purchase any additional pictures. In the event that Pride does not meet its funding requirements under this arrangement, the Company believes that it will be able to sufficiently fund future theatrical slates.

Société Générale de Financement du Québec. On July 30, 2007, the Company entered into a four-year filmed entertainment slate participation agreement with SGF, the Québec provincial government’s investment arm. SGF will provide up to 35% of production costs of television and feature film productions produced in Québec for a four-year period for an aggregate participation of up to $140 million, and the Company will advance all amounts necessary to fund the remaining budgeted costs. The maximum aggregate of budgeted costs over the four-year period will be $400 million, including the Company’s portion, but no more than $100 million per year. In connection with this agreement, the Company and SGF will proportionally share in the proceeds derived from the productions after the Company deducts a distribution fee, recoups all distribution expenses and releasing costs, and pays all applicable third party participations and residuals. At December 31, 2008, $124.5 million was available to be provided by SGF under the terms of the arrangement.

Filmed Entertainment Backlog. Backlog represents the amount of future revenue not yet recorded from contracts for the licensing of films and television product for television exhibition and in international markets. Backlog at December 31, 2008 and March 31, 2008 is $442.4 million and $437.4 million, respectively.

Cash Flows Used in Operating Activities. Cash flows used in operating activities for the nine months ended December 31, 2008 were $95.9 million compared to cash flows used in operating activities in the nine months ended December 31, 2007 of $91.2 million. The increase in cash used in operating activities was primarily due to increases in investment in films and television programs, decreases in cash provided by changes in accounts payable and accrued liabilities, participation and residuals, and deferred revenue, and a higher net loss generated in the nine months ended December 31, 2008, offset by decreases in accounts receivable and a higher amortization of films and television programs.

Cash Flows Provided by/Used in Investing Activities. Cash flows used in investing activities of $51.1 million for the nine months ended December 31, 2008 consisted of $6.5 million for purchases of property and equipment, $15.9 million for the investment in equity method investees and $28.8 million for increases in loans made to a third party producer and Break.com. Cash flows provided by investing activities of $202.1 million in the nine months ended December 31, 2007 included net proceeds from the sale of $256.6 million of investments available-for-sale, offset by $2.7 million for purchases of property and equipment, $6.5 million for the investment in equity method investees, $5.9 million for increases in loans made to Break.com and to Mandate Pictures before the acquisition date, and $41.2 million for the acquisition of Mandate Pictures, net of cash acquired.

Cash Flows Provided by/Used in Financing Activities. Cash flows used in financing activities of $89.4 million for the nine months ended December 31, 2008 resulted from increased production obligations of $126.4 million and the exercise of stock options of $2.9 million, offset by $165.3 million payment of production obligations, $45.0 million paid for the repurchase of the Company’s common shares, $3.1 million paid for tax withholding requirements associated with the vesting of shares, and $5.3 million paid for the redemption of $9.0 million of the Company’s subordinated notes. Cash flows provided by financing activities of $19.5 million in the nine months ended December 31, 2007 consisted of cash received from borrowings of $135.0 million and the exercise of stock options of $0.9 million, offset by $91.3 million repayment of production obligations, $20.3 million paid for the repurchase of the Company’s common shares, and $4.7 million paid for tax withholding requirements associated with the vesting of shares.

Anticipated Cash Requirements. The nature of our business is such that significant initial expenditures are required to produce, acquire, distribute and market films and television programs, while revenues from these films and television programs are earned over an extended period of time after their completion or acquisition. We believe that cash flow from operations, cash on hand, investments available-for-sale, credit facility availability, tax-efficient financing and production financing available will be adequate to meet known operational cash requirements for the foreseeable future, including the funding of future film and television production, film rights acquisitions and theatrical and DVD release schedules. We monitor our cash flow liquidity, availability, fixed charge coverage, capital base, film spending and leverage ratios with the long-term goal of maintaining our credit worthiness.

Our current financing strategy is to fund operations and to leverage investment in films and television programs through our cash flow from operations, our credit facility, single-purpose production financing, government incentive programs, film funds, and distribution commitments. In addition, we may acquire businesses or assets, including individual films or libraries, that are complementary to our business. Any such transaction could be financed through our cash flow from operations, credit facilities, equity or debt financing.

Future commitments under contractual obligations as of December 31, 2008 are as follows:


	Year Ended March 31,
	2009		2010		2011		2012		2013		Thereafter		Total
	(Amounts in thousands)

Future annual repayment of debt and other financing obligations as of December 31, 2008
Production obligations(1)	$	32,483	$	93,364	$	44,426	$	29,988	$	—	$	8,758	$	209,019
Interest payments on subordinated notes and other financing obligations		2,680		10,720		10,720		10,720		10,450		122,882		168,172
Subordinated notes and other financing obligations		—		—		—		—		3,718		316,000		319,718

	$	35,163	$	104,084	$	55,146	$	40,708	$	14,168	$	447,640	$	696,909
Contractual commitments by expected repayment date
Film obligations(1)	$	88,124	$	—	$	—	$	—	$	—	$	—	$	88,124
Distribution and marketing commitments(2)		20,636		28,759		25,200		—		—		—		74,595
Minimum guarantee commitments(3)		36,747		76,663		61,152		3,450		1,000		—		179,012
Production obligation commitments(3)		1,627		17,490		3,448		—		—		—		22,565
Operating lease commitments		2,165		8,850		8,243		4,406		2,294		2,095		28,053
Other contractual obligations		2,717		19,257		221		185		—		—		22,380
Employment and consulting contracts		9,331		29,186		15,889		5,213		1,624		1,189		62,432

	$	161,347	$	180,205	$	114,153	$	13,254	$	4,918	$	3,284	$	477,161

Total future commitments under contractual obligations	$	196,510	$	284,289	$	169,299	$	53,962	$	19,086	$	450,924	$	1,174,070


(1)		Film and production obligations include minimum guarantees, theatrical marketing obligations and production obligations as disclosed in Note 7 of our unaudited condensed consolidated financial statements. Repayment dates are based on anticipated delivery or release date of the related film or contractual due dates of the obligation.

(2)		Distribution and marketing commitments represent contractual commitments for future expenditures associated with distribution and marketing of films which the Company will distribute. The payment dates of these amounts are primarily based on the anticipated release date of the film.

(3)		Minimum guarantee commitments represent contractual commitments related to the purchase of film rights for future delivery. Production obligation commitments represent amounts committed for future film production and development to be funded through production financing and recorded as a production obligation liability. Future payments under these obligations are based on anticipated delivery or release dates of the related film or contractual due dates of the obligation. The amounts include future interest payments associated with the obligations.

Off-Balance Sheet Arrangements

We do not have any transactions, arrangements and other relationships with unconsolidated entities that will affect our liquidity or capital resources. We have no special purpose entities that provided off-balance sheet

financing, liquidity or market or credit risk support, nor do we engage in leasing, hedging or research and development services, that could expose us to liability that is not reflected in our financial statements.


Item 3.	*Quantitative and Qualitative Disclosures About Market Risk.*

Currency and Interest Rate Risk Management

Market risks relating to our operations result primarily from changes in interest rates and changes in foreign currency exchange rates. Our exposure to interest rate risk results from the financial debt instruments that arise from transactions entered into during the normal course of business. As part of our overall risk management program, we evaluate and manage our exposure to changes in interest rates and currency exchange risks on an ongoing basis. Hedges and derivative financial instruments will be used in the future in order to manage our interest rate and currency exposure. We have no intention of entering into financial derivative contracts, other than to hedge a specific financial risk.

Currency Rate Risk. The Company enters into forward foreign exchange contracts to hedge its foreign currency exposures on future production expenses denominated in Canadian dollars. As of December 31, 2008, the Company did not have outstanding forward foreign exchange contracts. Changes in the fair value representing a net unrealized fair value gain on foreign exchange contracts that qualified as effective hedge contracts outstanding during the three and nine months ended December 31, 2008 amounted to nil and $0.1 million and are included in accumulated other comprehensive income (loss), a separate component of shareholders’ equity. During the three and nine months ended December 31, 2008, the Company completed foreign exchange contracts denominated in Canadian dollars, including a contract that did not qualify as an effective hedge. The net gains (losses) resulting from the completed contracts were less than $(0.1) million and less than $0.1 million, respectively. These contracts are entered into with a major financial institution as counterparty. The Company is exposed to credit loss in the event of nonperformance by the counterparty, which is limited to the cost of replacing the contracts, at current market rates. The Company does not require collateral or other security to support these contracts.

Interest Rate Risk. Our principal risk with respect to our debt is interest rate risk. We currently have minimal exposure to cash flow risk due to changes in market interest rates related to our outstanding debt and other financing obligations. Our credit facility has a nil balance at December 31, 2008. Other financing obligations subject to variable interest rates include $116.6 million owed to film production entities on delivery of titles.

The table below presents repayments and related weighted average interest rates for our interest-bearing debt and production obligations and subordinated notes and other financing obligations as of December 31, 2008.


	Year Ended March 31,
	2009		2010		2011		2012		2013		Thereafter		Total
	(Amounts in thousands)

Revolving Credit Facility:
Variable(1)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Production Obligations:
Variable(2)		33,202		75,953		7,416		—		—		—		116,571
Fixed(3)		—		—		—		—		—		8,758		8,758
Subordinated Notes and Other Financing Obligations:
Fixed(4)		—		—		—		—		—		150,000		150,000
Fixed(5)		—		—		—		—		—		166,000		166,000
Fixed(6)		—		—		—		—		3,718		—		3,718

	$	33,202	$	75,953	$	7,416	$	—	$	3,718	$	324,758	$	445,047


(1)		Revolving credit facility, which expires July 25, 2013 and bears interest at 2.25% over the Adjusted LIBOR rate. At December 31, 2008, the Company had no borrowings under this facility.


(2)		Amounts owed to film production entities on anticipated delivery date or release date of the titles or the contractual due dates of the obligation. Production obligations of $116.6 million incur interest at rates ranging from approximately 1.94% to 4.25%. Not included in the table above are approximately $83.7 million of production obligations which are non-interest bearing.

(3)		Long term production obligations of $8.8 million with a fixed interest rate equal to 2.50%.

(4)		2.9375% Notes with fixed interest rate equal to 2.9375%.

(5)		3.625% Notes with fixed interest rate equal to 3.625%.

(6)		Other financing obligation with fixed interest rate equal to 8.02%.


Item 4.	*Controls and Procedures.*

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These rules refer to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of December 31, 2008, the end of the period covered by this report, the Company carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness of our disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer have concluded that such controls and procedures were effective as of December 31, 2008.

Changes in Internal Control over Financial Reporting

As required by Rule 13a-15(d) of the Exchange Act, the Company, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, also evaluated whether any changes occurred to the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, such control. Based on that evaluation, there has been no such change during the period covered by this report.

PART II — OTHER INFORMATION


Item 1.	*Legal Proceedings.*

None


Item 1A.	*Risk Factors.*

Other than the updates below, there were no other material changes to the risk factors previously reported in our Annual Report on Form 10-K for the fiscal year ended March 31, 2008.

The following updates the risk factor entitled “We face substantial capital requirements and financial risks — Substantial leverage could adversely affect our financial condition” in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended March 31, 2008.

Substantial leverage could adversely affect our financial condition. Historically, we have been highly leveraged and may be highly leveraged in the future. We have access to capital through our $340 million credit facility with JPMorgan Chase Bank, N.A. and a balance under letters of credit for $22.7 million. In addition, we have $316 million Convertible Senior Subordinated Notes outstanding, with $150 million maturing October 15, 2024 and $166 million maturing March 15, 2025. At March 31, 2008, we had approximately $371.6 million in cash and cash equivalents. We have currently drawn down on $255 million of our credit facility, and could borrow

additional or all of the permitted amount in the future. The amount we have available to borrow under this facility depends upon our borrowing base, which in turn depends on the value of our existing library of films and television programs, as well as accounts receivable and cash held in collateral accounts. If several of our larger motion picture releases are commercial failures or our library declines in value, our borrowing base could decrease. Such a decrease could have a material adverse effect on our business, results of operations and financial condition. For example, it could:


	•	require us to dedicate a substantial portion of our cash flow to the repayment of our indebtedness, reducing the amount of cash flow available to fund motion picture and television production, distribution and other operating expenses;

	•	limit our flexibility in planning for or reacting to downturns in our business, our industry or the economy in general;

	•	limit our ability to obtain additional financing, if necessary, for operating expenses, or limit our ability to obtain such financing on terms acceptable to us; and

	•	limit our ability to pursue strategic acquisitions and other business opportunities that may be in our best interests.

The following updates the risk factor entitled “We face risks related to our theatrical slate financing arrangement” in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended March 31, 2008.

We face risks related to our theatrical slate financing arrangement. On May 25, 2007, the Company closed a theatrical slate funding agreement through a series of agreements, as amended on January 30, 2008. Under this arrangement, Pride, an unrelated entity, generally funded 50% of the Company’s production, acquisition, marketing and distribution costs of theatrical feature films up to an aggregate of approximately $196 million, net of transaction costs. The funds available from Pride were generated from the issuance by Pride of $35 million of subordinated debt instruments, $35 million of equity and $134 million from a senior credit facility, which was subject to a borrowing base. The percentage of the contribution varied on certain pictures. Pride participated in a pro rata portion of the pictures net profits or losses similar to a co-production arrangement based on the portion of costs funded. The Company distributed the pictures covered by the arrangement with a portion of net profits after all costs and the Company’s distribution fee being distributed to Pride based on their pro rata contribution to the applicable costs similar to a back-end participation on a film.

The funding obligations were subject to a borrowing base calculation and certain conditions precedent. The administrative agent for the senior lenders under the facility has taken the position that the senior lenders no longer have an obligation to continue to fund under the facility because the conditions precedent to funding set forth in the facility cannot be satisfied. The representative for Pride has not yet taken a position as to the validity of the administrative agent’s assertion. As a consequence, it is unknown whether Pride will purchase any additional pictures. While the Company believes that it will be able to sufficiently fund future theatrical slates in the event that Pride does not meet its funding requirements under this arrangement, the lack of funding may create a material adverse effect on the Company’s results of operations and financial conditions.

The following updates the risk factor entitled “We must successfully respond to rapid technological changes and alternative forms of delivery or storage to remain competitive” in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended March 31, 2008.

We must successfully respond to rapid technological changes and alternative forms of delivery or storage to remain competitive.

The entertainment industry in general and the motion picture and television industries in particular continue to undergo significant technological developments. Advances in technologies or alternative methods of product delivery or storage or certain changes in consumer behavior driven by these or other technologies and methods of delivery and storage could have a negative effect on our business. Examples of such advances in technologies include video-on-demand, new video formats, including release of titles in high-definition Blu-Ray Disc format, and

downloading and streaming from the internet. An increase in video-on-demand could decrease home video rentals. In addition, technologies that enable users to fast-forward or skip advertisements, such as digital video recorders, may cause changes in consumer behavior that could affect the attractiveness of our products to advertisers, and could therefore adversely affect our revenues. Similarly, further increases in the use of portable digital devices that allow users to view content of their own choosing while avoiding traditional commercial advertisements could adversely affect our revenues. Other larger entertainment distribution companies will have larger budgets to exploit these growing trends. We cannot predict how we will financially participate in the exploitation of our motion pictures and television programs through these emerging technologies or whether we have the right to do so for certain of our library titles. If we cannot successfully exploit these and other emerging technologies, it could have a material adverse effect on our business, results of operations and financial condition.


Item 2.	*Unregistered Sales of Equity Securities and Use of Proceeds.*

Repurchase of Equity Securities

The following table sets forth information with respect to shares of our common stock purchased by us during the three months ended December 31, 2008:

ISSUER PURCHASES OF EQUITY SECURITIES(1)


							(d) Approximate
							Dollar Value of
					(c) Total Number of		Shares that May Yet
	(a) Total Number				Shares Purchased as Part		Be Purchased Under
	of Shares		(b) Average Price		of Publicly Announced		the Plans or
Period	Purchased		Paid per Share		Plans or Programs		Programs

October 1, 2008 — October 31, 2008		—		—		—	$	35,300,000
November 1, 2008 — November 30, 2008		38,400	$	6.00		38,400	$	85,080,000
December 1, 2008 — December 31, 2008		—		—		—	$	85,080,000
Total		38,400	$	6.00		38,400	$	85,080,000


(1)		On May 31, 2007, our Board of Directors authorized the repurchase of up to $50 million of our common shares. Thereafter, (i) on May 29, 2008, as part of its regularly scheduled year-end meeting, our Board of Directors authorized the repurchase of up to an additional $50 million of our common shares, subject to market conditions, and (ii) on November 6, 2008, as part of its regularly scheduled meeting, our Board of Directors authorized the repurchase up to an additional $50 million of our common shares, subject to market conditions. The additional resolutions increased the total authorization to $150 million. The common shares may be purchased, from time to time, at the Company’s discretion, including the quantity, timing and price thereof. Such purchases will be structured as permitted by securities laws and other legal requirements. During the period from the authorization date through December 31, 2008, 6,787,310 shares have been repurchased at a cost of approximately $65.2 million (including commission costs). The share repurchase program has no expiration date.


Item 3.	*Defaults Upon Senior Securities.*

None


Item 4.	*Submission of Matters to a Vote of Security Holders.*

None.


Item 5.	*Other Information.*

Director Indemnity Agreement

On February 5, 2008, our Board of Directors approved a form of indemnity agreement (the “Form Agreement”) between us and our current and future directors. The Form Agreement, among other things, indemnifies a director under the circumstances and to the extent provided for therein, for expenses, judgments, fines and certain other amounts such director may be required to pay in actions or proceedings to which he or she is or may be made a party by reason of his or her position as a director, to the fullest extent permitted under laws of British Columbia and our Articles of Incorporation. The Form Agreement is attached hereto as Exhibit 10.62 is incorporated herein by reference.


Item 6.	*Exhibits.*


Exhibit
Number			Description of Documents

	3	.1(1)	Articles
	3	.2(2)	Notice of Articles
	3	.3(2)	Vertical Short Form Amalgamation Application
	3	.4(2)	Certificate of Amalgamation
	10	.54(3)	Amendment of Employment Agreement between the Company and Jon Feltheimer dated October 8, 2008.
	10	.55(4)	Equity Purchase Agreement dated January 5, 2009, by and among Lions Gate Entertainment, Inc., Gemstar-TV Guide International, Inc., TV Guide Entertainment Group, Inc., UV Corporation and Macrovision Solutions Corporation.
	10	.56(5)	Employment Agreement between the Company and James Keegan dated January 14, 2009.
	10	.57	Amended and Restated Employment Agreement between the Company and Jon Feltheimer dated December 15, 2008.
	10	.58	Amended and Restated Employment Agreement between the Company and Michael Burns dated December 15, 2008.
	10	.59	Amended and Restated Employment Agreement between the Company and Steven Beeks dated December 15, 2008.
	10	.60	Amended and Restated Employment Agreement between the Company and James Keegan dated December 15, 2008.
	10	.61	Amended and Restated Employment Agreement between the Company and Wayne Levin dated December 15, 2008.
	10	.62	Form of Director Indemnity Agreement.
	31	.1	Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31	.2	Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	.1	Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


(1)		Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2005 as filed on June 29, 2005.

(2)		Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2007 as filed on May 30, 2007.

(3)		Incorporated by reference to the Company’s Current Report on Form 8-K filed on October 14, 2008.

(4)		Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 9, 2009 (filed as Exhibit 10.54).

(5)		Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 16, 2009 (filed as Exhibit 10.55).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LIONS GATE ENTERTAINMENT CORP.


	By:	/s/ James Keegan

Name: James Keegan


	Title:	Duly Authorized Officer and Chief Financial Officer

Date: February 9, 2009

Exhibit 10.57

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (this “Agreement”) by and between Lions Gate Entertainment Corp. (“Lions Gate”) and Jon Feltheimer (“Feltheimer”) is entered into as of December 15, 2008 with effect as of September 20, 2006 (the “Effective Date”). The employment agreement entered into as of September 20, 2006 between Feltheimer and Lions Gate, as subsequently amended (the “Prior Agreement”), is hereby amended and restated in its entirety.

The parties hereby agree as follows:

1. Employment . Lions Gate hereby employs Feltheimer to serve in the capacity of Chief Executive Officer (“CEO”) and a member of Lions Gate’s board of directors (the “Board”) on the terms and conditions set forth herein. Feltheimer shall have such powers and authority with respect to the management of Lions Gate consistent with his position hereunder as shall be determined by the Board. All employees of Lions Gate, its divisions and subsidiaries shall report to Feltheimer and he shall have hiring and firing authority over same; provided, however, that subject to prior good faith consultation with Feltheimer, the Board shall have the right to instruct Feltheimer to terminate any such employee with respect to whom it believes in good faith it has “cause” (as defined in Section 14(a)(iii) below) and may thereafter terminate such employee if Feltheimer elects not to do so. Feltheimer shall be responsible to and report solely to the Board.

2. Term . Feltheimer’s employment term under this Agreement shall commence on September 20, 2006 and continue through and including March 31, 2014 (the “Term”).

3. Base Salary . From the Effective Date through March 31, 2007, Lions Gate shall pay Feltheimer an annual fixed salary of US$850,000, payable in equal installments in accordance with Lions Gate’s standard payroll practices. Commencing on April 1, 2007, and continuing through the end of the Term, Lions Gate shall pay Feltheimer an annual fixed salary of US$1,200,000 payable in equal installments in accordance with Lions Gate’s standard payroll practices (the “Base Salary”). Notwithstanding the foregoing, commencing on October 8, 2011 (the “Amendment Date”) and on each anniversary of the Amendment Date during the remaining portion of the Term, the Base Salary for the next twelve (12) months shall be increased in the same proportion as the proportional difference between the “Consumer Price Index for Urban Wage Earners All Items (Los Angeles-Riverside-Orange County, CA),” published by the United States Department of Labor, Bureau of Labor Statistics (the “CPI”) in effect on March 1 of the preceding year and the CPI in effect as of the Amendment Date and as of each successive anniversary of the Amendment Date during the Term.

4. Discretionary Annual Bonus . During the Term, Feltheimer shall be eligible to receive a discretionary annual bonus (the “Discretionary Bonus”) based on Lions Gate’s fiscal year in an amount to be determined in the sole and absolute discretion of Lions Gate’s Compensation Committee, using the following criteria (with no emphasis to be derived from the order in which they appear) to arrive at their decision: EBITDA; revenue and bottom line

Page 1 of 18

performance; Lions Gate’s ability to pay such bonus; earnings; free cash-flow levels; debt reduction; and share price increase. For the fiscal year beginning on April 1, 2007, Lions Gate will also, in addition to the foregoing criteria, be guided, informally, by a formula of 100% of base salary, if annual targets are met, but the Compensation Committee will also consider other criteria, such as transformative transactions completed by the Company. The Discretionary Bonus, if any, shall be payable in a timely manner, but in any event when bonuses, if any, are generally given to Lions Gate’s other senior-level employees and in no event later than June 15 of each year during the Term, and, in addition, June 15 of 2014 (for bonus amounts based on the fiscal year ending March 31, 2014).

4A. Life and Disability Insurance . During the Term, Lions Gate shall provide Feltheimer with life and disability insurance policies providing Feltheimer (or his estate, as applicable) with US$2,000,000 in benefits.

5. Stock Price Bonus . If, during the Term, the volume-weighted average of the median (between the high and low of each trading day) daily Company stock price is not less than US$13.00 per share for a period of six (6) consecutive months, then Lions Gate shall pay Feltheimer a one time bonus (in addition to any other compensation payable pursuant to this Agreement) in the sum of US$750,000 (the “Stock Price Bonus ”) within five (5) business days following the satisfaction of the preceding condition.

In addition, if during the Term the volume-weighted average of the median (between the high and low of each trading day) daily Company stock price is not less than US$16.00 per share for a period of six (6) consecutive months, then Lions Gate shall pay Feltheimer a one time additional Stock Price Bonus of US$750,000 within five (5) business days following the satisfaction of the preceding condition.

In addition, if during the Term the volume-weighted average of the median (between the high and low of each trading day) daily Company stock price is not less than US$19.00 per share for a period of six (6) consecutive months, then Lions Gate shall pay Feltheimer a one time additional Stock Price Bonus of US$750,000 within five (5) business days following the satisfaction of the preceding condition.

For the avoidance of doubt, Feltheimer shall not be entitled to receive the Stock Price Bonus at any specified target more than one time and the maximum aggregate bonus that could be payable to Feltheimer under any scenario pursuant to this Section 5 is US$2,250,000; provided further that a single rise in stock price can trigger all three Stock Price Bonuses.

Notwithstanding the foregoing, if on or before the time a Stock Price Bonus(es) becomes payable an applicable bank has declared Lions Gate to be in material default of any of its bank covenants, and such default is directly attributable to Feltheimer’s negligent disregard of any such covenants (of which he has received notice) or his negligent supervision of any of his direct reports, Feltheimer shall not be entitled to such Stock Price Bonus(es); provided, however, the foregoing shall be subject to mandatory binding arbitration as set forth in Section 21(f) below should Feltheimer dispute Lions Gate’s position with respect thereto.

Page 2 of 18

6. Restricted Stock Units .

(a) Grant of Restricted Stock Units . Provided that Feltheimer’s employment hereunder has not previously been terminated for cause (as defined herein), death, or disability (as defined herein) and subject to regulatory approval, if required, Feltheimer shall be granted a total of 640,000 Restricted Stock Units (“RSUs”) according to the following schedule: (i) 320,000 time vesting RSUs shall be granted promptly following the Effective Date (the “Time Vesting RSUs”); (ii) 320,000 performance vesting RSUs shall be granted in four (4) annual grants (one-fourth for each year) on April 1, 2007, April 1, 2008, April 1, 2009, and April 1, 2010 (the “Performance Vesting RSUs”). Such RSUs shall be payable upon vesting in an equal number of common shares of Lions Gate. The foregoing RSUs shall be in addition to any equity interest (whether options, warrants or otherwise) granted to Feltheimer, previously or otherwise, pursuant to any employment agreement or otherwise (collectively, the “Pre-existing Equity”).

(b) Date of Vesting . Subject to Feltheimer’s continued employment hereunder through the relevant vesting date, the RSUs shall vest as follows:

(i) The Time Vesting RSUs (320,000 RSUs) shall vest in four (4) equal annual installments with the first such installment vesting on September 20, 2007, and the last vesting on September 20, 2010.

(ii) The Performance Vesting RSUs shall be eligible to vest on an annual schedule with the first grant being eligible to vest on March 31, 2008, the second on March 31, 2009, the third on March 31, 2010, and the fourth on March 31, 2011 (each, a “Performance Vesting Date”); provided, however, that the vesting of the RSUs on each such Performance Vesting Date shall be subject to satisfaction of annual Company performance targets approved in advance by the Compensation Committee for the twelve (12) month period ending on such Performance Vesting Date. The RSUs provided for by this Section 6(b)(ii) shall vest on a sliding scale basis if the Company performance targets have not been fully met for a particular year. For purposes of example only, if seventy five (75) percent of Company targets have been met for a particular year, seventy five (75) percent of the grant for that year would vest. Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, provide that any or all of the RSUs scheduled to vest on any such Performance Vesting Date shall be deemed vested as of such date even if the applicable performance targets are not met. Furthermore, the Compensation Committee may, in its sole discretion, provide that any RSUs scheduled to vest on any such Performance Vesting Date that do not vest because the applicable performance targets are not met may vest on any future Performance Vesting Date if the performance targets applicable to such future Performance Vesting Date are exceeded.

(c) Acceleration of Vesting : If the vesting of the RSUs are accelerated pursuant to Section 9(b) or Section 14(c)(iii) below, then the foregoing requirement that Feltheimer be an employee shall not apply with respect to any of the foregoing vesting dates.

(d) Failure to Obtain Shareholder or Regulatory Approval : If shareholder or regulatory approval of the grant of the RSUs is necessary and Lions Gate is unable to obtain such approval for all or any portion of the RSUs, then Feltheimer shall be entitled to alternative commensurate compensation, the details of which shall be negotiated in good faith.

Page 3 of 18

(e) Acceleration of Vesting Upon Death . In the event that this Agreement is terminated pursuant to Section 14(a)(i) below, all RSUs and Options granted to Feltheimer pursuant to this Agreement, to the extent outstanding and unvested, will immediately accelerate and become fully vested as of the date of death.

(f) Second Grant of Restricted Stock Units . Provided that Feltheimer’s employment hereunder has not previously been terminated for cause (as defined herein), death, or disability (as defined herein) and subject to regulatory approval, if required, Feltheimer shall be granted, on or about October 8, 2008, a total of 916,071 Restricted Stock Units (“Second RSUs”) according to the following schedule: (i) 458,036 time vesting Second RSUs (the “Second Time Vesting RSUs”); (ii) 458,035 performance vesting Second RSUs (the “Second Performance Vesting RSUs”). Such Second RSUs shall be payable upon vesting in an equal number of common shares to Lions Gate. The foregoing Second RSUs shall be in addition to any Pre-existing Equity.

(g) Date of Vesting . Subject to Feltheimer’s continued employment hereunder through the relevant vesting date, the Second RSUs shall vest as follows:

(i) The Second Time Vesting RSUs (458,036 RSUs) shall vest in three (3) equal annual installments with the first such installment vesting on March 31, 2012, and the last vesting on March 31, 2014;

(ii) The Second Performance Vesting RSUs (458,035 RSUs) shall be eligible to vest in three (3) equal annual installments with the first installment being eligible to vest on March 31, 2012, the second on March 31, 2013, and the third on March 31, 2014 (each, a “Second Performance Vesting Date”); provided, however, that the vesting of the Second RSUs on each such Second Performance Vesting Date shall be subject to annual Company performance targets approved in advance by the Compensation Committee for the twelve (12) month period ending on such Second Performance Vesting Date. The Second Performance Vesting RSUs provided for by this Section 6(g)(ii) shall vest on a sliding scale basis if the Company performance targets have not been fully met for a particular year. For purposes of example only, if seventy five (75) percent of Company targets have been met for a particular year, seventy five (75) percent of the Second Performance Vesting RSUs eligible to vest for that year would vest. Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, provide that any or all of the Second Performance Vesting RSUs scheduled to vest on any such Second Performance Vesting Date shall be deemed vested as of such date even if the applicable performance targets are not met. Furthermore, the Compensation Committee may, in its sole discretion, provide that any Second RSUs scheduled to vest on any such Second Performance Vesting Date that do not vest because the applicable performance targets are not met may vest on any future Second Performance Vesting Date if the performance targets applicable to such Second Performance Vesting Date are exceeded.

(h) Any and all references to RSUs in Sections 6(c), 6(d), 6(e), 7(a), 10 and 14(b)(iii) of the Agreement shall include the Second RSUs set forth above, unless the context requires otherwise. Any and all references to the Time Vesting RSUs in Sections 9(b)(i) and 14(c)(iii) of the Agreement shall include the Second Time Vesting RSUs, unless the context requires otherwise. Any and all references to the Performance Vesting RSUs in Sections 9(b)(ii)

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and 14(c)(iii) of the Agreement shall include the Second Performance Vesting RSUs, unless the context requires otherwise. Any and all references to the Performance Vesting Date in Sections 9(b)(ii) and 14(c)(iii) of the Agreement shall include the Second Performance Vesting Date, unless the context requires otherwise.

(i) Quarterly Grant . Subject to Feltheimer’s continued employment hereunder through the relevant grant date and subject to regulatory approval, if required, on the first day following each three (3) month anniversary of October 8, 2008 that occurs during the Term (each, a “grant date”), Feltheimer shall be issued a number of the Company’s common shares equivalent to TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00), calculated using the closing price (in regular trading) of the Company’s common shares on the last trading day immediately prior to the respective grant date (each a “Quarterly Grant”) and subject in each case to applicable tax withholding. Each Quarterly Grant shall be fully vested upon grant, and the shares subject to such Quarterly Grant shall be issued not more than five (5) business days after the applicable grant date. Notwithstanding the foregoing, subject to Feltheimer’s continued employment hereunder through March 31, 2014 and subject to regulatory approval, if required, on March 31, 2014 Feltheimer shall receive a pro-rata portion of a Quarterly Grant for the period ending on March 31, 2014 based on the period of time elapsed since the immediately preceding Quarterly Grant. Notwithstanding the foregoing, in the event that this Agreement is terminated pursuant to Section 14(a)(iv) or 14(b), the Quarterly Grants shall continue to be granted on each quarterly grant date through the prorated grant scheduled to be made on March 31, 2014, and no further Quarterly Grants shall be made after that date. For the sake of clarity, notwithstanding Section 6(e), any future Quarterly Grants shall be forfeited in the event that this Agreement, and Feltheimer’s employment hereunder, is terminated pursuant to Section 14(a)(i), 14(a)(ii) or 14(a)(iii). Additionally for the sake of clarity, any and all references to RSUs in Sections 6(c) and 6(e) of the Agreement shall not include any Quarterly Grant. If shareholder or regulatory approval of any Quarterly Grant is necessary and Lions Gate is unable to obtain such approval for all or any portion of a Quarterly Grant, then Feltheimer shall be entitled to alternative commensurate compensation, the details of which shall be negotiated in good faith.

7. Options .

(a) Grant of Options . Provided that Feltheimer’s employment hereunder has not been terminated for cause (as defined herein), death or disability (as defined herein), and subject to shareholder approval thereof (which Lions Gate acknowledges has been received to the extent required) and regulatory approval, if required, on or about the Effective Date Feltheimer shall be granted an option to purchase 1,050,000 shares of Lions Gate stock (the “Options”) at a per-share exercise price equal to the closing price of a Lions Gate common share on the date the Options are granted. The foregoing Options shall be in addition to any Pre-existing Equity as well as the RSU grants provided for in this Agreement.

(b) Date of Vesting; Date Exercisable . Subject to Feltheimer’s continued employment hereunder, the Options shall vest and become exercisable as to 262,500 shares on each of September 20, 2007, September 20, 2008, September 20, 2009 and September 20, 2010; provided, however, if the vesting of the Options and rights to exercise are accelerated pursuant to

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Section 9(b) or Section 14(c)(iii) below, then the foregoing requirement that Feltheimer be an employee shall not apply with respect to any of the foregoing vesting dates.

(c) Offset; Favored Nations . Lions Gate agrees that the Options shall be provided under the most favorable circumstances allowed for senior executives under the plan governing such options. Except as otherwise expressly provided herein, the Pre-existing Equity shall continue to be subject to the terms and conditions of the agreement(s) pursuant to which it was originally granted.

(d) Failure to Obtain Shareholder or Regulatory Approval . If Lions Gate’s shareholders fail to approve Company’s grant of the Options (in this regard, Lions Gate acknowledges that plan approval has already been obtained), or if regulatory approval of the grant of the Options is necessary and Lions Gate is unable to obtain such approval for all or any portion of the Options, then Feltheimer shall be entitled to alternative commensurate compensation, the details of which shall be negotiated in good faith.

8. Stock Appreciation Rights . Pursuant to the Prior Agreement, Feltheimer and the Company agreed to the cancellation of the 375,000 stock appreciation rights (“SARs”) which were granted to Feltheimer pursuant to his December 11, 2001 Agreement. In exchange for the cancellation of such SARs, the Company paid Feltheimer US$2.1 million (subject to all applicable tax withholdings) following the Effective Date. Feltheimer agrees that he no longer has any rights with respect to such SARs.

9. Change of Control . In the event of a “Change of Control” as defined below, the following shall apply:

(a) Change of Control definition . For purposes of this Agreement, the term “Change of Control” shall mean:

(i) if any person, other than a trustee or other fiduciary holding securities of Lions Gate under an employee benefit plan of Lions Gate, becomes the beneficial owner, directly or indirectly, of securities of Lions Gate representing 33% or more of the outstanding shares of common stock of Lions Gate as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate;

(ii) if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, there is a sale or disposition of 33% or more of Lions Gate’s assets (or consummation of any transaction, or series of related transactions, having similar effect);

(iii) if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, there occurs a change or series of changes in the composition of the Board as a result of which half or less than half of the directors are incumbent directors;

(iv) if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, a

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shareholder or group of shareholders acting in concert obtain control of 33% or more of the outstanding shares;

(v) if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, a shareholder or group of shareholders acting in concert obtain control of half of the Board;

(vi) if there is a dissolution or liquidation of Lions Gate; or

(vii) if there is any transaction or series of related transactions that has the substantial effect of any one or more of the foregoing.

(b) Unvested Restricted Stock Units/Options . If a Change in Control occurs while Feltheimer is employed by Lions Gate hereunder:

(i) Any then-unvested portion of the Time Vesting RSUs and any then-unvested portion of the Options shall immediately and fully vest, and the Options shall become immediately and fully exercisable.

(ii) The Performance Vesting RSUs that are eligible to vest on the next Performance Vesting Date after the date of such Change in Control (but not including any Performance Vesting RSUs that were eligible to vest on any preceding Performance Vesting Date and did not vest on such date) shall immediately and fully vest. Unless otherwise provided by the Compensation Committee, any Performance Vesting RSUs that have not vested after giving effect to the foregoing sentence shall immediately terminate.

(i) If, in connection with a Change of Control, Feltheimer’s employment is terminated by Lions Gate for any reason, excepting only termination for cause (as set forth in Section 14(a)(iii) below) or due to Feltheimer’s death or Disability, then, subject to Section 14(d)(ii) but notwithstanding any other provision to the contrary in Section 14 below, Feltheimer shall be entitled, in addition to the Accrued Obligations, to the payment of US$2,500,000 within five (5) business days after Feltheimer’s Separation from Service and shall be entitled to the continued payment of Base Salary thereafter through March 31, 2014 in accordance with Lions Gate’s standard payroll practices.

(ii) For a period of thirty (30) days following the effective date of the Change of Control (i.e., the date of the formal closing of the transaction), Feltheimer shall have the right, exercisable in his sole discretion, to terminate his employment hereunder by giving written notice thereof to Lions Gate within such thirty (30) day period, in which event Feltheimer shall be entitled, subject to Section 14(d)(ii) and in addition to the Accrued Obligations, to the payment of US$2,500,000 within five (5) business days after Feltheimer’s Separation from Service; provided, however, that Feltheimer shall not be entitled to any further payment of Base Salary beyond any such amounts that are then accrued but unpaid.

(iii) As used herein, a “Separation from Service” occurs when Feltheimer dies, retires, or otherwise has a termination of employment with Lions Gate that

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constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.

(iv) As used herein, “Accrued Obligations” means accrued but unpaid (A) Base Salary, (B) Stock Price Bonus, (C) expense reimbursement due to Feltheimer pursuant to Section 12, (D) vacation pay, if any, and (E) Discretionary Bonus for the fiscal year preceding the year in which the termination occurs, if any.

(d) Waiver of Stock Price Bonus Condition Precedent . If at the effective time of a Change of Control, Lions Gate’s share price is US$13.00, $16.00 or $19.00 per share or greater than any of the foregoing, then Lions Gate shall pay Feltheimer any applicable Stock Price Bonus(es) associated with such Lions Gate share price as set forth in Section 5 above, without regard to the six-month requirement set forth in Section 5 above, within five (5) business days following such Change of Control.

(e) Section 280G . Notwithstanding any other provision in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, Feltheimer under any other Lions Gate plan or agreement (such payments or benefits are collectively referred to as the “Payments” for purposes of this Section 9(e)) would be subject to the excise tax (the “Excise Tax”) imposed under Section 4999 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), then either clause (i) or clause (ii) below shall apply, whichever would result in Feltheimer retaining the greatest amount of the Payments on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), where (i) and (ii) are as follows:

(i) The Payments shall be reduced (but not below zero) such that the total amount of the Payments is $1 less than would cause the Payments to be subject to the Excise Tax (such reduced amount is referred to hereinafter as the “Limited Payment Amount”). In such case, the Payments shall be reduced or eliminated by first reducing or eliminating cash severance payments, then by reducing or eliminating other cash payments, then by reducing or eliminating those payments or benefits which are not payable in cash, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as hereinafter defined). Any notice given by Feltheimer pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing Feltheimer’s rights and entitlements to any benefits or compensation.

(ii) Feltheimer shall be entitled to retain the full amount of the Payments. Lions Gate shall make a “gross-up” payment to Feltheimer equal to the amount of such Excise Tax together with any additional taxes and Excise Tax due on the amount of such gross-up payment; provided that in no event shall Lions Gate be obligated to make any payment to Feltheimer pursuant to this sentence in excess of US$150,000. Any such gross-up payment shall be made not later than forty (40) days after the date a Determination is made pursuant to the next paragraph that such payment is required hereunder and in all events not later than the end of the calendar year following the year in which Feltheimer remits the related taxes. Except for such gross-up payment in the maximum amount of US$150,000, Feltheimer shall be solely responsible for the payment of the Excise Tax and any and all other tax obligations with respect

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to any such gross-up payment and the Payments (and subject to any withholding obligations that Lions Gate may have with respect to such payment and the Payments).

For purposes of this Section 9(e), a determination as to whether the Payments shall be reduced to the Limited Payment Amount, the amount of such Limited Payment Amount and the amount of any gross-up payment (up to the US$150,000 maximum) shall be made by Lions Gate’s independent public accountants or another certified public accounting firm of national reputation mutually approved by Lions Gate and Feltheimer (the “Accounting Firm”). Lions Gate and Feltheimer shall use their reasonable efforts to cause the Accounting Firm to provide its determination (the “Determination”), together with detailed supporting calculations and documentation to Lions Gate and Feltheimer within five (5) days of the date of termination of Feltheimer’s employment, if applicable, or such other time as requested by Lions Gate or Feltheimer (provided Feltheimer reasonably believes that any of the Payments may be subject to the Excise Tax), and if the Accounting Firm determines that no Excise Tax is payable by Feltheimer with respect to any Payments, Lions Gate and Feltheimer shall use their reasonable efforts to cause the Accounting Firm to furnish Feltheimer with an opinion reasonably acceptable to Feltheimer that no Excise Tax will be imposed with respect to any such Payments. Unless Feltheimer provides written notice to Lions Gate within thirty (30) days of the delivery of the Determination to Feltheimer that he disputes such Determination, the Determination shall be binding, final and conclusive upon Lions Gate and Feltheimer.

10. Benefits . During the Term, Feltheimer shall be entitled to benefits not less favorable than the benefits provided by Lions Gate to its other senior-level employees, including, without limitation, the right to participate in Lions Gate’s medical insurance and retirement plans and, subject to the approval of the Board, appropriate incentive/bonus compensation plans (the “Benefits”). Without limiting the foregoing, Lions Gate agrees that the Benefits will be no less favorable to Feltheimer in all material respects than the benefits Feltheimer currently receives from Lions Gate. Without limiting the foregoing, (a) when Feltheimer is traveling out of town for business related purposes he shall be entitled to US$50 per day for business related tips and taxi expenses, without receipts, (b) Feltheimer shall be entitled to a flat US$35 per week for local and out of town business related parking charges, without receipts, and (c) Lions Gate shall reimburse Feltheimer up to a maximum amount of US$1,000 per month for monthly membership dues for a private club of Feltheimer’s choice in New York, New York, which Feltheimer shall use for business related purposes. Notwithstanding the foregoing, nothing contained in this Agreement shall obligate Lions Gate to adopt or implement any Benefits, or prevent or limit Lions Gate from making any blanket amendments, changes, or modifications of the eligibility requirements or any other provisions of, or terminating, in its entirety, any Benefit at any time, and Feltheimer’s participation in or entitlement under any such Benefit shall at all times be subject in all respects thereto. Feltheimer’s entitlement to the Benefits shall be in addition to the other compensation payable pursuant to this Agreement. Feltheimer shall be entitled to take paid time off without a reduction in salary, subject to the demands and requirements of Feltheimer’s duties and responsibilities under the Agreement. Feltheimer shall not accrue any vacation.

11. Office/Personnel . During the Term, Lions Gate shall provide Feltheimer with parking, and an office and secretarial assistance for his exclusive use, all in accordance with his reasonable requirements and commensurate with his title, duties and responsibilities.

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12. Business Expenses . Lions Gate shall, consistent with its normal practice, promptly reimburse Feltheimer for all travel, entertainment and other reasonable business expenses incurred by him in promoting the business of Lions Gate. Feltheimer shall be entitled to reimbursement of travel, business and entertainment expenses at a level commensurate with his position as CEO, consistent with Lions Gate’s then-normal practices for an executive at Feltheimer’s level.

13. Devotion of Time/Services . Feltheimer recognizes that consistent with his position as CEO he is required to devote all of his business time and services to the business and interests of Lions Gate and, due to Feltheimer’s high level position, failure to do so would cause a material and substantial disruption to Lions Gate’s operations. Consistent with the foregoing, Feltheimer agrees that he shall not undertake any activity that is in direct conflict with the essential enterprise related interests of Lions Gate. Notwithstanding the foregoing, Feltheimer shall retain the right to engage in pre-existing outside consulting activities (which shall be minimal), passive (whether or not pre-existing) investment activities, charitable activities and/or political activities so long as the activities do not directly conflict or interfere with Feltheimer’s duties under this Agreement.

14. Termination .

(a) Lions Gate’s Right To Terminate . Lions Gate shall have the right to terminate this Agreement and Feltheimer’s employment hereunder prior to March 31, 2014 only for the following reasons:

(i) upon the death of Feltheimer;

(ii) by giving written notice of termination to Feltheimer during the continuance of any Disability (as defined below) at any time after he has been unable to perform the material services or material duties required of him in connection with his employment by Lions Gate as a result of physical or mental Disability (or disabilities) which has (or have) continued for a period of twelve (12) consecutive weeks, or for a period of sixteen (16) weeks in the aggregate, during any twelve (12) consecutive month period. Notwithstanding any other provision herein, during any period of Disability hereunder which lasts for more than two (2) consecutive weeks, in its exercise of good faith business judgment, and in consultation with Feltheimer (if practical), the Board may appoint an interim CEO to fulfill the duties and responsibilities of Feltheimer and such appointment shall not be deemed a breach of this Agreement; provided, however, that upon the termination of Feltheimer’s Disability, Feltheimer shall immediately resume the position of sole CEO and his duties and responsibilities in accordance with the terms of this Agreement and the interim CEO shall cease serving in such capacity. For purposes of this Agreement, “Disability” shall mean a physical or mental impairment which renders Feltheimer unable to perform the essential functions of his position, with even reasonable accommodation which does not impose an undue hardship on Lions Gate. Lions Gate reserves the right, acting reasonably and in good faith, to make the determination of Disability under this Agreement based upon information supplied by Feltheimer and/or his medical personnel, as well as information from medical personnel (or others) selected by Lions Gate or its insurers;

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(iii) by giving written notice of termination for cause. “Cause” as used herein means: (A) conviction of a felony, except a felony relating to a traffic accident or traffic violation; (B) gross negligence or willful misconduct with respect to Lions Gate, which shall include, but is not limited to theft, fraud or other illegal conduct, refusal or unwillingness to perform employment duties, sexual harassment, any willful (and not legally protected act) that is likely to and which does in fact have the effect of injuring the reputation, business or a business relationship of Lions Gate, violation of any fiduciary duty, and violation of any duty of loyalty; or (C) any material breach of this Agreement by Feltheimer; provided, however, Lions Gate shall not terminate Feltheimer’s employment hereunder pursuant to this Section 14(a)(iii)(C) unless it shall first give Feltheimer written notice of the alleged defect and the same is not cured within fifteen (15) business days of such written notice; or

(iv) by giving notice of termination without cause.

(b) Feltheimer’s Right To Terminate . Feltheimer’s employment with Lions Gate may be terminated by Feltheimer for Good Reason. For purposes of this Agreement, “Good Reason” shall mean:

(i) without the written consent of Feltheimer, any action by Lions Gate that results in a material diminution in Feltheimer’s position, authority, duties or responsibilities as in effect on the date Feltheimer executes this Agreement, including without limitation inserting any other person in the chain of authority between Feltheimer and the Board, but excluding an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by Lions Gate promptly after receipt of written notice thereof given by Feltheimer;

(ii) without the written consent of Feltheimer, a material change in any of the reporting relationships (up or down), excluding for this purpose (A) the Board’s instruction to terminate a lower employee pursuant to Section 1 above and Feltheimer’s refusal to do so or (B) an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by Lions Gate promptly after receipt of written notice thereof given by Feltheimer;

(iii) a reduction of Feltheimer’s Base Salary, Stock Price Bonus (when payable), RSUs (and/or related vesting and exercise rights), Options grant (and/or related vesting and exercise rights) or the Benefits as in effect on the commencement of the Term or as the same may be increased from time to time;

(iv) a Change of Control as set forth in Section 9(c)(ii) above, provided that Feltheimer’s right to terminate his employment pursuant to said Section shall be limited as set forth therein; or

(v) any material breach of this Agreement by Lions Gate.

Good Reason shall not include death or disability. Feltheimer’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder. Feltheimer shall provide Lions Gate written notice of any claimed event of Good Reason and Lions Gate shall have an opportunity to cure any claimed event of Good Reason within fifteen (15) business days of notice from Feltheimer. Lions Gate shall notify Feltheimer of the timely cure of any claimed event of Good Reason and the manner

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in which such cure was effected, and upon receipt of written notice from Feltheimer of his concurrence that a cure has been effectuated, any notice of termination delivered by Feltheimer based on such claimed Good Reason shall be deemed withdrawn and shall not be effective to terminate this Agreement.

(i) With Cause . If Lions Gate terminates this Agreement “for cause” as defined above, Lions Gate shall have no further obligation to pay Feltheimer any compensation other than the Accrued Obligations. Notwithstanding the foregoing, Lions Gate shall have no obligation to pay any Stock Price Bonus under this Section 14(c)(i) if this Agreement is terminated based on Feltheimer’s commission of a material fraud against Lions Gate; provided, however, any such material fraud shall have been determined by binding arbitration as set forth in Section 21(f) below.

(ii) Death or Disability . In the event of the termination of this Agreement for death or Disability, Lions Gate shall have the obligation to pay Feltheimer’s estate or Feltheimer, as applicable, any Accrued Obligations. If on the date of death or termination for Disability the volume-weighted average median stock price of Lions Gate’s stock for the immediately prior four (4) month (or longer) period is US$13.00, $16.00, or $19.00 per share or greater, then the applicable Stock Price Bonus(es) shall be paid in full if it otherwise becomes payable in accordance with the conditions set forth in Section 5 above applied without regard to the early termination of this Agreement. If on the date of death or termination for Disability the volume-weighted average median stock price of Lions Gate’s stock for the immediately prior period of less than four (4) months is US$13.00, $16.00, or $19.00 per share or greater, then a pro-rated share of the applicable Stock Price Bonus(es) shall be paid if the Stock Price Bonus(es) otherwise becomes payable in accordance with the conditions set forth in Section 5 above applied without regard to the early termination of this Agreement (i.e., if the target was achieved over the two (2) month period immediately prior to termination for death or Disability and four (4) months later the target was achieved for the whole six (6) month period, then Feltheimer (or his estate, if applicable) would receive one third (1/3) of the applicable Stock Price Bonus(es)). Any Stock Price Bonus or portion thereof that becomes payable pursuant to this paragraph shall be paid within five (5) business days following the completion of the applicable six-month period. In addition, in the event of the termination of this Agreement due to Feltheimer’s death (but not Disability), all RSUs and Options granted to Feltheimer pursuant to this Agreement, to the extent outstanding and unvested, will immediately accelerate and become fully vested as of the date of death.

(iii) Without Cause or Termination by Feltheimer for Good Reason . If Lions Gate terminates Feltheimer’s employment without cause, or Feltheimer terminates his employment with Lions Gate for Good Reason (which, for purposes of this Section 14(c)(iii) shall not include a voluntary termination by Feltheimer pursuant to Section 9(c)(ii) above), then Lions Gate shall pay Feltheimer (A) subject to Section 14(d)(ii), a lump sum payment within 10 days following his Separation from Service equal to the present value (using the then prevailing rate of interest charged to Lions Gate by its principal lender as the discount rate) of payment of Feltheimer’s Base Salary through March 31, 2014 to the extent not theretofore paid; and (B) any Accrued Obligations. In addition, (i) any then-outstanding and unvested Time Vesting RSUs and

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any then-outstanding unvested portion of the Option shall immediately and fully vest and become exercisable, and (ii) the Performance Vesting RSUs that are eligible to vest on the next Performance Vesting Date after the date of such termination (but not including any Performance Vesting RSUs that were eligible to vest on any preceding Performance Vesting Date and did not vest on such date) shall immediately and fully vest. Any Performance Vesting RSUs that have not vested after giving effect to the foregoing sentence shall immediately terminate. To the extent theretofore not provided, Lions Gate shall also pay for or provide to Feltheimer any Benefits and/or other incentive/bonus plans (other than the Discretionary Bonus) which he was receiving at the time of termination, and Feltheimer shall continue to be eligible for Stock Price Bonus(es) without regard to the early termination of this Agreement, through March 31, 2014. If Feltheimer’s employment with Lions Gate is terminated pursuant to Section 9(c), 14(a)(iv) and/or 14(b) above, Feltheimer shall have no obligation to mitigate and Lions Gate shall have no right to offset any income thereafter received by Feltheimer against Lions Gate’s payment obligations to him.

(d) Section 409A .

(i) It is intended that any amounts payable under this Agreement and any exercise of authority or discretion hereunder by Lions Gate or Feltheimer shall comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) (“Section 409A”) so as not to subject Feltheimer to payment of any interest or additional tax imposed under Section 409A. To the extent that any amount payable under this Agreement would trigger the additional tax imposed by Section 409A, this Agreement shall be construed and interpreted in a manner to avoid such additional tax yet preserve (to the nearest extent reasonably possible) the intended benefit payable to Feltheimer.

(ii) Notwithstanding any other provision herein, if Feltheimer is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Feltheimer’s Separation from Service, Feltheimer shall not be entitled to any payment or benefit pursuant to Section 9(c) or 14(c)(iii) above until the earlier of (i) the date which is six (6) months after his or her Separation from Service for any reason other than death, or (ii) the date of Feltheimer’s death. Any amounts otherwise payable to Feltheimer upon or in the six (6) month period following Feltheimer’s Separation from Service that are not so paid by reason of this Section 14(d)(ii) shall be paid as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after Feltheimer’s Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of Feltheimer’s death), and any such payments shall be increased by an amount equal to interest on such payments for the period commencing with the date such payment would have otherwise been made but for this Section 14(d)(ii) (the “Original Payment Date”) and ending on the date such payment is actually made, at an interest rate equal to the prevailing rate of interest charged to Lions Gate by its principal lender in effect as of the Original Payment Date. The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.

(iii) To the extent that any benefits or reimbursements pursuant to Section 10, Section 12 or Section 14(c) are taxable to Feltheimer, any reimbursement payment due to Feltheimer pursuant to any such provision shall be paid to Feltheimer on or before the last

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day of Feltheimer’s taxable year following the taxable year in which the related expense was incurred. The benefits and reimbursements pursuant to such provisions are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Feltheimer receives in one taxable year shall not affect the amount of such benefits or reimbursements that Feltheimer receives in any other taxable year.

15. Indemnification . Except with respect to claims resulting from Feltheimer’s willful misconduct or acts outside the scope of his employment hereunder, Feltheimer shall be indemnified by Lions Gate (whether during or after the Term) in respect of all claims arising from or in connection with his position or services as an officer of Lions Gate to the maximum extent permitted in accordance with Lions Gate’s Certificate of Incorporation, its By-Laws and under applicable law, and shall be covered by Lions Gate’s applicable directors and officers insurance policy, which coverage shall be no less favorable than that accorded any other officer or director of Lions Gate.

16. Company Policies . Feltheimer shall abide by the provisions of all policy statements, including without limitation any conflict of interest policy statement, of Lions Gate or adopted by Lions Gate from time to time during the Term and furnished to Feltheimer in writing or of which he has notice.

17. Non-Solicitation . Feltheimer shall not, during the Term and for a period of one (1) year thereafter, directly or indirectly, induce or attempt to induce any employee of Lions Gate or its affiliates, to leave Lions Gate or its affiliates or to render employment services for any other person, firm or corporation.

18. Property of Lions Gate . Feltheimer acknowledges that the relationship between the parties hereto is exclusively that of employer and employee and that Lions Gate’s obligations to him are exclusively contractual in nature. Lions Gate and/or its affiliates shall be the sole owner or owners of all interests and proceeds of Feltheimer’s services hereunder, including without limitation, all ideas, concepts, formats, suggestions, developments, arrangements, designs, packages, programs, scripts, audio visual materials, promotional materials, photography and other intellectual properties and creative works which Feltheimer may prepare, create, produce or otherwise develop in connection with and during his employment hereunder, including without limitation, all copyrights and all rights to reproduce, use, authorize others to use and sell such properties or works at any time or place for any purpose, free and clear of any claims by Feltheimer (or anyone claiming under him) of any kind or character whatsoever (other than Feltheimer’s right to compensation hereunder). Feltheimer shall have no right in or to such properties or works and shall not use such properties or works for his own benefit or the benefit of any other person. Feltheimer shall, at the reasonable request of Lions Gate, execute such assignments, certificates, applications, filings, instruments or other documents consistent herewith as Lions Gate may from time to time reasonably deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend its right, title and interest in or to such properties or works. Notwithstanding anything to the contrary herein, Feltheimer’s personal rolodex shall remain his personal property during the term of this Agreement and following its expiration or earlier termination. Feltheimer’s assignment of rights in this Section 18 does not apply to any invention which fully qualifies under Section 2870 of the California Labor Code.

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19. Confidential Information . All memoranda, notes, records and other documents made or compiled by Feltheimer, or made available to him during his employment with Lions Gate concerning the business or affairs of Lions Gate or its affiliates shall be Lions Gate’s property and shall be delivered to Lions Gate on the termination of this Agreement or at any other time on request from the Board. Feltheimer shall keep in confidence and shall not use for himself or others, or divulge to others, any information concerning the business or affairs of Lions Gate or its affiliates which is not otherwise publicly available and which is obtained by Feltheimer as a result of his employment, including without limitation, trade secrets or processes and information reasonably deemed by Lions Gate to be proprietary in nature, including without limitation, financial information, programming or plans of Lions Gate or its affiliates, unless disclosure is permitted by Lions Gate or required by law or legal process.

20. Right to Use Name . During the term, Lions Gate shall have the right to use Feltheimer’s approved biography, name and approved likeness in connection with its business, including in advertising its products and services, but not for use as a direct or indirect endorsement.

21. Miscellaneous .

(a) Governing Law . This Agreement shall be governed and construed in accordance with the laws of the State of California without regard to principles of conflict of laws.

(b) Amendments . This Agreement may be amended or modified only by a written instrument executed by each of the parties hereto.

(c) Titles and Headings . Section or other headings contained herein are for convenience of reference only and shall not affect in any way the meaning or interpretation of any of the terms or provisions hereof.

(d) Entire Agreement . This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements, negotiations and understandings of the parties in connection therewith (including, without limitation, the Prior Agreement, except as expressly provided herein). Notwithstanding the foregoing, except as expressly set forth herein, the terms and conditions of the agreements that evidence equity-based awards granted by Lions Gate to Feltheimer that are outstanding as of the date hereof are outside of the scope of the preceding provisions of this Section 21(d) and continue in effect.

(e) Successors and Assigns . This Agreement is binding upon the parties hereto and their respective successors, assigns, heirs and personal representatives. Except as specifically provided herein, neither of the parties hereto may assign the rights and duties of this Agreement or any interest therein, by operation of law or otherwise, without the prior written consent of the other party, except that, without such consent, Lions Gate shall assign this Agreement to and provide for the assumption thereof by any successor to all or substantially all of its stock, assets and business by dissolution, merger, consolidation, transfer of assets or otherwise.

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(f) Arbitration . In exchange for the benefits of the speedy, economical and impartial dispute resolution procedure of arbitration, Lions Gate and Feltheimer, with the advice and consent of their selected counsel, choose to forego their right to resolution of their disputes in a court of law by a judge or jury, and instead elect to treat their disputes, if any, pursuant to the Federal Arbitration Act and/or California Civil Procedure Code §§ 1281 et seq .

(i) Feltheimer and Lions Gate agree that any and all claims or controversies whatsoever brought by Feltheimer or Lions Gate, arising out of or relating to this Agreement, Feltheimer’s employment with Lions Gate, or otherwise arising between Feltheimer and Lions Gate, will be settled by final and binding arbitration in accordance with the applicable rules and procedures of Judicial Arbitration and Mediation Services, Inc. (“JAMS”). This includes all claims whether arising in tort or contract and whether arising under statute or common law. Such claims may include, but are not limited to, those relating to this Agreement, wrongful termination, retaliation, harassment, or any statutory claims under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Fair Employment and Housing Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, or similar Federal or state statutes. In addition, any claims arising out of the public policy of California, any claims of wrongful termination, employment discrimination, retaliation, or harassment of any kind, as well as any claim related to the termination or non-renewal of this Agreement shall be arbitrated under the terms of this Agreement. The obligation to arbitrate such claims will survive the termination of this Agreement. Lions Gate shall be responsible for all costs of the arbitration services, including the fees and costs of the arbitrator and court reporter fees, unless Feltheimer wishes to share such costs voluntarily. To the extent permitted by law, the hearing and all filings and other proceedings shall be treated in a private and confidential manner by the arbitrator and all parties and representatives, and shall not be disclosed except as necessary for any related judicial proceedings.

(ii) The arbitration will be conducted before an arbitrator who is a member of JAMS and mutually selected by the parties from the JAMS Panel. In the event that the parties are unable to mutually agree upon an arbitrator, each party shall select an arbitrator from the JAMS Panel and the two selected arbitrators shall jointly select a third, and the arbitrators shall jointly preside over the arbitration. The arbitrator(s) will have jurisdiction to determine the arbitrability of any claim. The arbitrator(s) shall have a business office in or be a resident of Los Angeles County, California. The arbitrator(s) shall have the authority to grant all monetary or equitable relief (including, without limitation, injunctive relief, ancillary costs and fees, and punitive damages) available under state and Federal law. Either party shall have the right to appeal any adverse rulings or judgments to the JAMS Panel of Retired Appellate Court Justices. Judgment on any award rendered by the arbitrator(s) may be entered and enforced by any court having jurisdiction thereof.

(iii) Notwithstanding the foregoing, the parties agree to participate in non-binding mediation with a mutually selected mediator prior to initiation of any arbitration process, except that either party may file any formal arbitration demand as necessary to preserve their legal rights.

22. Severability . Each section, subsection and lesser portion of this Agreement constitutes a separate and distinct undertaking, covenant and/or provision hereof. In the event

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that any provision of this Agreement shall finally be determined to be unlawful or unenforceable, such provision shall be deemed to be severed from this Agreement, but every other provision shall remain in full force and effect.

23. Construction . Each party has cooperated in the drafting and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against any party on the basis that the party was the drafter.

24. Legal Counsel . In entering this Agreement, the parties represent that they have relied upon the advice of their attorneys, who are attorneys of their own choice, and that the terms of this Agreement have been completely read and explained to them by their attorneys, and that those terms are fully understood and voluntarily accepted by them.

25. Waiver . No waiver of any breach of any term or provision of this Agreement shall be construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach.

26. Execution . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Photographic and facsimile copies of such signed counterparts may be used in lieu of the originals for any purpose.

27. Notices . All notices to be given pursuant to this agreement shall be effected either by mail or personal delivery in writing as follows:

Lions Gate :

Lions Gate Entertainment
2700 Colorado Avenue, Suite 200
Santa Monica, California 90404
Attention: General Counsel

Feltheimer :

Jon Feltheimer
c/o Lions Gate Entertainment
2700 Colorado Avenue, Suite 200
Santa Monica, California 90404

w/copy to:
Del, Shaw, Moonves, Tanaka, Finkelstein & Lezcano
Attn: Ernest Del, Esq. and Jeffrey Finkelstein, Esq.
2120 Colorado Avenue, Suite 200
Santa Monica, California 90404

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In witness whereof, the parties hereto have executed this Agreement as of the date first above written.


		“LIONS GATE”

		LIONS GATE ENTERTAINMENT CORP. ,

		By:		/s/ Wayne Levin
		Its:		Executive Vice President and General Counsel

		“FELTHEIMER”

		/s/ Jon Feltheimer

		Jon Feltheimer

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Exhibit 10.58

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (this “Agreement”) by and between Lions Gate Entertainment Corp. (“Lions Gate”) and Michael Burns (“Burns”) is entered into as of December 15, 2008. The employment agreement entered into as of September 1, 2006, between Burns and Lions Gate, as subsequently amended (the “Prior Agreement”), is hereby amended and restated in its entirety.

This Agreement relates to the terms and conditions of Burns’ employment with Lions Gate for the term specified herein.

The parties hereby agree as follows:

1. Employment . Lions Gate hereby employs Burns to serve in the capacity of Vice Chairman of Lions Gate on the terms and conditions set forth herein. Burns shall render such services as are customarily provided by persons in the capacity of Vice Chairman in the motion picture industry and as may be reasonably requested by Lions Gate. Burns hereby agrees to comply with all reasonable requirements, directions and requests, and with all reasonable rules and regulations made by Lions Gate in connection with the regular conduct of its business; to render services during Burns’ employment hereunder whenever and wherever and as often as Lions Gate may reasonably require in a competent, conscientious and professional manner, and as instructed by Lions Gate in all matters, including those involving artistic taste and judgment, but there shall be no obligation on Lions Gate to cause or allow Burns to render any services, or to include all or any of Burns’ work or services in any motion picture or other property or production. Notwithstanding the foregoing, Lions Gate acknowledges that Burns is a shareholder of Ignite Entertainment and the parties agree to negotiate at arms length any matters concerning Lions Gate and Ignite.

2. Term . Burns’ employment term under this Agreement shall commence on September 1, 2006 (the “Effective Date”) and continue through and including September 1, 2011, subject to early termination as provided in this Agreement (the “Term”).

3. Base Salary . Lions Gate shall pay Burns an annual fixed salary of US$750,000 from September 1, 2006 through September 9, 2008 (“Base Salary — Period 1”), US$925,000 from September 10, 2008 through September 1, 2010 (“Base Salary — Period 2”) and US$950,000 from September 2, 2010 through the end of the Term (“Base Salary — Period 3”) payable in equal installments in accordance with Lions Gate’s standard payroll practices (Base Salary — Period 1, Base Salary — Period 2 and Base Salary — Period 3 collectively referred to herein as the “Base Salary”).

4. Bonuses .

(a) Discretionary Annual Bonus . During the Term, Burns shall be eligible to receive a discretionary annual bonus (the “Discretionary Bonus”) based on Lions Gate’s fiscal

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year. Lions Gate’s Chief Executive Officer shall recommend a bonus amount, if any, for Burns with input from Lions Gate’s Compensation Committee (“Compensation Committee”) and the Compensation Committee shall have sole and absolute discretion regarding the bonus amount and Burns’ entitlement to a bonus. Burns’ entitlement to a bonus and/or the amount of bonus shall be determined using the following criteria (with no emphasis to be derived from the order in which they appear): EBITDA; revenue and bottom line performance; Lions Gate’s ability to pay such bonus; earnings; free cashflow levels; debt reduction; and share price. Lions Gate will be guided, informally, by a formula of 100% of base salary, if annual targets are met, but the Compensation Committee will also consider other criteria, such as transformative transactions for which Burns is materially responsible. The Discretionary Bonus, if any, shall be payable in a timely manner, but in any event when bonuses, if any, are generally given to Lions Gate’s other senior-level employees. Burns shall be eligible for consideration by the Compensation Committee, at the end of the fiscal year, for a pro-rata Discretionary Bonus for those years in which he is employed for only a portion of the applicable fiscal year. All bonuses, if any, shall be payable at the time such bonuses are given to Lions Gate’s other senior-level employees.

5. Stock Price Bonus . If, during the Term, the volume-weighted average of the median (between the high and low of each trading day) daily Company stock price is not less than US$13.00 per share for a period of six (6) consecutive months, then Lions Gate shall pay Burns a one time bonus (in addition to any other compensation payable pursuant to this Agreement) in the sum of US$600,000 (the “Stock Price Bonus”) within five (5) business days following the satisfaction of the preceding condition.

In addition, if during the Term the volume-weighted average of the median (between the high and low of each trading day) daily Company stock price is not less than US$16.00 per share for a period of six (6) consecutive months, then Lions Gate shall pay Burns a one time additional Stock Price Bonus of US$600,000 within five (5) business days following the satisfaction of the preceding condition.

In addition, if during the Term the volume-weighted average of the median (between the high and low of each trading day) daily Company stock price is not less than US$19.00 per share for a period of six (6) consecutive months, then Lions Gate shall pay Burns a one time additional Stock Price Bonus of US$600,000 within five (5) business days following the satisfaction of the preceding condition.

For the avoidance of doubt, Burns shall not be entitled to receive the Stock Price Bonus at any specified target more than one time and the maximum aggregate bonus that could be payable to Burns under any scenario pursuant to this Section 5 or any other provision of this Agreement is US$1,800,000; provided further that a single rise in stock price can trigger all three Stock Price Bonuses.

Notwithstanding the foregoing, if on or before the time the Stock Price Bonus becomes payable an applicable bank has declared Lions Gate to be in material default of any of its bank covenants, and such default is directly attributable to Burns’ negligent disregard of any such covenants (of which he has received notice) or his negligent supervision of any of his direct reports, Burns shall not be entitled to the Stock Price Bonus; provided, however, the foregoing

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shall be subject to binding arbitration as set forth in Section 19(f) should Burns dispute Lions Gate’s position with respect thereto.

6. Restricted Stock Units .

(a) Grant of Restricted Stock Units . Provided that Burns’ employment hereunder has not previously been terminated for Cause (as defined herein), death, or Disability (as defined herein) or at his own election and subject to regulatory approval, if required, Burns shall be granted a total of 666,666 Restricted Stock Units (“RSUs”) according to the following schedule: (i) 333,333 time vesting RSUs shall be granted as soon as practicable after the Effective Date (the “Time Vesting RSUs”); (ii) 333,333 performance vesting RSUs shall be granted in four (4) annual grants (one-fourth for each year) with the first such grant to be made as soon as practicable after the Effective Date and subsequent grants to be made on September 1, 2007, September 1, 2008, and September 1, 2009 (the “Performance Vesting RSUs”). Such RSUs shall be payable upon vesting in an equal number of common shares of Lions Gate. The foregoing RSUs shall be in addition to any equity interest (whether options, warrants or otherwise) previously granted to Burns pursuant to any previous employment agreement or otherwise, which expressly includes but is not limited to 375,000 phantom shares in favor of Burns granted by agreement dated December 11, 2001 (collectively, the “Pre-existing Equity”).

(b) Date of Vesting . Subject to Burns’ continued employment hereunder through the relevant vesting date, the RSUs shall vest as follows:

(i) The Time Vesting RSUs (333,333 RSUs) shall vest in four (4) equal annual installments with the first such installment vesting on September 1, 2007, and the last vesting on September 1, 2010;

(ii) The Performance Vesting RSUs shall be eligible to vest on an annual schedule with the first grant being eligible to vest on September 1, 2007, the second on September 1, 2008, the third on September 1, 2009, and the fourth on September 1, 2010 (each, a “Performance Vesting Date”); provided, however, that the vesting of the RSUs on each such Performance Vesting Date shall be subject to satisfaction of annual Company performance targets approved in advance by the Compensation Committee for the twelve (12) month period ending on such Performance Vesting Date. The Performance Vesting RSUs provided for by this Section 6(b)(ii) shall vest on a sliding scale basis if the Company performance targets have not been fully met for a particular year. For purposes of example only, if seventy five (75) percent of Company targets have been met for a particular year, seventy five (75) percent of the grant for that year would vest. Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, provide that any or all of the RSUs scheduled to vest on any such Performance Vesting Date shall be deemed vested as of such date even if the applicable performance targets are not met. Furthermore, the Compensation Committee may, in its sole discretion, provide that any Performance Vesting RSUs scheduled to vest on any such Performance Vesting Date that do not vest because the applicable performance targets are not met may vest on any future Performance Vesting Date if the performance targets applicable to such future Performance Vesting Date are

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exceeded.

(c) Acceleration of Vesting . If the vesting of the RSUs are accelerated pursuant to Section 8(b) or Section 12(b) below, then the foregoing requirement that Burns be an employee shall not apply with respect to any of the foregoing vesting dates.

(d) Second Grant of Restricted Stock Units . Provided that Burns’ employment hereunder has not previously been terminated for Cause (as defined herein), death, or Disability (as defined herein) or at his own election and subject to regulatory approval, if required, Burns shall be granted, on or about September 22, 2008, a total of 274,285 Restricted Stock Units (“Second RSUs”) according to the following schedule: (i) 137,143 time vesting Second RSUs (the “Second Time Vesting RSUs”); (ii) 137,142 performance vesting Second RSUs (the “Second Performance Vesting RSUs”). Such Second RSUs shall be payable upon vesting in an equal number of common shares to Lions Gate. The foregoing Second RSUs shall be in addition to any Pre-existing Equity.

(e) Date of Vesting . Subject to Burns’ continued employment hereunder through the relevant vesting date, the Second RSUs shall vest as follows:

(i) The Second Time Vesting RSUs (137,143 RSUs) shall vest in three (3) equal annual installments with the first such installment vesting on September 1, 2009, and the last vesting on September 1, 2011;

(ii) The Second Performance Vesting RSUs (137,142 RSUs) shall be eligible to vest in three (3) equal annual installments with the first installment being eligible to vest on September 1, 2009, the second on September 1, 2010, and the third on September 1, 2011 (each, a “Second Performance Vesting Date”); provided, however, that the vesting of the Second RSUs on each such Second Performance Vesting Date shall be subject to annual Company performance targets approved in advance by the Compensation Committee for the twelve (12) month period ending on such Second Performance Vesting Date. The Second Performance Vesting RSUs provided for by this Section 6(e)(ii) shall vest on a sliding scale basis if the Company performance targets have not been fully met for a particular year. For purposes of example only, if seventy five (75) percent of Company targets have been met for a particular year, seventy five (75) percent of the Second Performance Vesting RSUs eligible to vest for that year would vest. Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, provide that any or all of the Second Performance Vesting RSUs scheduled to vest on any such Second Performance Vesting Date shall be deemed vested as of such date even if the applicable performance targets are not met. Furthermore, the Compensation Committee may, in its sole discretion, provide that any Second Performance Vesting RSUs scheduled to vest on any such Second Performance Vesting Date that do not vest because the applicable performance targets are not met may vest on any future Second Performance Vesting Date if the performance targets applicable to such Second Performance Vesting Date are exceeded.

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(f) Any and all references to RSUs in Sections 6(c), 8(b)(ii), 8(c), 12(a) and 12(b) of this Agreement shall include the Second RSUs set forth above, unless the context requires otherwise. Any and all references to the Time Vesting RSUs in Sections 8(b)(i) and 12(b) of this Agreement shall include the Second Time Vesting RSUs, unless the context requires otherwise. Any and all references to the Performance Vesting RSUs in Sections 8(b)(ii) and 12(b) of this Agreement shall include the Second Performance Vesting RSUs, unless the context requires otherwise. Any and all references to the Performance Vesting Date in Sections 8(b)(ii) and 12(b) of this Agreement shall include the Second Performance Vesting Date, unless the context requires otherwise.

(g) Acceleration of Vesting Upon Death . In the event that this Agreement is terminated pursuant to Section 11(b) below, all RSUs and Options granted to Burns pursuant to this Agreement, to the extent then-outstanding and unvested, will immediately accelerate and become fully vested as of the date of death.

7. Options .

(a) Grant of Options . Provided that Burns’ employment hereunder has not been terminated for Cause (as defined herein), death, or Disability (as defined herein) or at his own election and subject to regulatory approval, if required, Burns shall be granted, as soon as practicable after the Effective Date, an option to purchase 1,050,000 shares of Lions Gate stock (“the Option”) at a per-share exercise price equal to the closing price of a Lions Gate common share on the date the Option is granted. The foregoing Option shall be in addition to any Pre-existing Equity as well as the RSU grants provided for in this Agreement.

(b) Date of Vesting; Date Exercisable . Subject to Burns’ continued employment hereunder, the Option shall vest and become exercisable as to 262,500 shares on each of September 1, 2007, September 1, 2008, September 1, 2009 and September 1, 2010; provided, however, if the vesting of the Option and rights to exercise are accelerated pursuant to Section 8(b) or Section 12(b) below, then the foregoing requirement that Burns be an employee shall not apply with respect to any of the foregoing vesting dates.

8. Change of Control . In the event of a “Change of Control” as defined below, the following shall apply:

(a) Change of Control definition . For purposes of this Agreement, the term “Change of Control” shall mean:

(ii) if, as a result of one or more related transactions in the context of a

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merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, there is a sale or disposition of 33% or more of Lions Gate’s assets (or consummation of any transaction, or series of related transactions, having similar effect);

(iv) if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, a shareholder or group of shareholders acting in concert obtain control of 33% or more of the outstanding shares;

(vi) if there is a dissolution or liquidation of Lions Gate; or

(vii) if there is any transaction or series of related transactions that has the substantial effect of any one or more of the foregoing.

(b) Unvested Restricted Stock Units/Options . If a Change of Control occurs while Burns is employed by Lions Gate hereunder:

(i) Any then-unvested portion of the Time Vesting RSUs and any then-unvested portion of the Option shall immediately and fully vest, and the Option shall become immediately and fully exercisable.

(ii) The Performance Vesting RSUs that are eligible to vest on the next Performance Vesting Date (as defined in the applicable award agreement) after the date of such Change of Control (but not including any Performance Vesting RSUs that were eligible to vest on any preceding Performance Vesting Date and did not vest on such date) shall immediately and fully vest. Unless otherwise provided by the Compensation Committee, any Performance Vesting RSUs that have not vested after giving effect to the foregoing sentence shall immediately terminate.

(i) If, in connection with a Change of Control, Burns’ employment is terminated by Lions Gate for any reason, excepting only termination for Cause (as set forth in Section 11(d) below) or due to Burns’ death or Disability, then, subject to Section 13(b) but notwithstanding any other provision to the contrary in Section 12 below, Burns shall be entitled, in addition to the Accrued Obligations, to the payment of US$1,800,000

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or the remainder of the Base Salary to be paid through September 1, 2011 (whichever amount is greater), together with the Options and the RSUs vested as a result of the Change of Control as described above, as well as Discretionary Bonus, if any, within five (5) business days after Burns’ Separation from Service.

(ii) For a period of fifteen (15) days following the effective date of the Change of Control (i.e., the date of the formal closing of the transaction) or notice from Lions Gate (whichever is later), Burns shall have the right, exercisable in his sole discretion, to terminate his employment hereunder by giving written notice thereof to Lions Gate within such fifteen (15) day period, in which event Burns shall be entitled, subject to Section 13(b) and in addition to the Accrued Obligations, to the payment of US$1,800,000 or the remainder of the Base Salary to be paid through September 1, 2011 (whichever amount is greater) within five (5) business days after Burns’ Separation from Service, together with the Options and the RSUs vested as a result of the Change of Control as described above, as well as Discretionary Bonus, if any.

(iii) As used herein, a “Separation from Service” occurs when Burns dies, retires, or otherwise has a termination of employment with Lions Gate that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.

(iv) As used herein, “Accrued Obligations” means accrued but unpaid (A) Base Salary, (B) Stock Price Bonus, (C) expense reimbursement, (D) vacation pay, if any, (E) vested RSUs and Options, and (F) pro rata Discretionary Bonus for the year in which Burns’ termination of employment occurs, if any.

(d) Waiver of Stock Price Bonus Condition Precedent . If at the effective time of a Change of Control, Lions Gate’s share price is US$13.00, $16.00 or $19.00 per share or greater than any of the foregoing, then Lions Gate shall pay Burns any applicable Stock Price Bonus, without regard to the six-month requirement set forth in Section 5 above, within five (5) business days following such Change of Control.

9. Benefits . During the Term, Burns shall be eligible for all employee benefits (health insurance and vacation) and 401(k) per Lions Gate’s standard benefit program for an employee employed by Lions Gate at Burns’ level. Burns shall be entitled to take paid time off without a reduction in salary, subject to the demands and requirements of Burns’ duties and responsibilities under this Agreement. Burns shall not accrue any vacation. Burns shall be entitled to a car allowance in the amount of US$1,111 per month. Notwithstanding the foregoing, nothing contained in this Agreement shall obligate Lions Gate to adopt or implement any benefits, or prevent or limit Lions Gate from making any blanket amendments, changes, or modifications of the eligibility requirements or any other provisions of, or terminating, in its entirety, any benefit at any time, and Burns’ participation in or entitlement under any such benefit shall at all times be subject in all respects thereto.

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10. Devotion of Time/Services . Burns recognizes that consistent with his position as Vice Chairman he is required to devote all of his business time and services to the business and interests of Lions Gate and, due to Burns’ high level position, failure to do so would cause a material and substantial disruption to Lions Gate’s operations. Consistent with the foregoing, Burns agrees that he shall not undertake any activity that is in direct conflict with the essential enterprise related interests of Lions Gate.

11. Termination .

This Agreement shall terminate upon the happening of any one or more of the following events:

(a) upon mutual written agreement between Lions Gate and Burns;

(b) upon the death of Burns;

(c) by Lions Gate giving written notice of termination to Burns during the continuance of any Disability (as defined below) at any time after he has been unable to perform the material services or material duties required of him in connection with his employment by Lions Gate as a result of physical or mental Disability (or disabilities) which has (or have) continued for a period of ninety (90) days, or for a period of ninety (90) days in the aggregate, during any twelve (12) consecutive month period. For purposes of this Agreement, “Disability” shall mean a physical or mental impairment which renders Burns unable to perform the essential functions of his position, with even reasonable accommodation, which does not impose an undue hardship on Lions Gate. Lions Gate reserves the right, acting reasonably and in good faith, to make the determination of Disability under this Agreement based upon information supplied by Burns and/or his medical personnel, as well as information from medical personnel (or others) selected by Lions Gate or its insurers. Burns shall have ten (10) days following written notice by Lions Gate to cure the Disability;

(d) by giving written notice of termination for Cause. “Cause,” as used herein, means that Lions Gate, acting reasonably and in good faith, determines or believes that Burns has engaged in or committed any of the following: (A) conviction of a felony, except a felony relating to a traffic accident or traffic violation; (B) gross negligence or willful misconduct with respect to Lions Gate, which shall include, but is not limited to theft, fraud or other illegal conduct, refusal or unwillingness to perform employment duties, sexual harassment, any willful (and not legally protected act) that is likely to and which does in fact have the effect of injuring the reputation, business or a business relationship of Lions Gate, violation of any fiduciary duty, and violation of any duty of loyalty; or (C) any material breach of this Agreement by Burns; provided, however, Lions Gate shall not terminate Burns’ employment hereunder pursuant to this Section 11(d) unless it shall first give Burns written notice of the alleged defect and the same is not cured within fifteen (15) business days of such written notice;

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(e) by Burns giving notice of his intention to terminate for one of the following reasons:

(i) in connection with a Change of Control as set forth in Section 8 above, provided that Burns’ right to terminate pursuant to said section shall be limited as set forth therein,

(ii) Burns accepts a full time position with the federal or state government,

(iii) Burns accepts a full time position with a philanthropic or non-profit organization, or

(iv) Burns moves his permanent residence from the U.S. to another country.

(f) by Lions Gate giving notice to Burns of termination without Cause.

12. Effect of Termination .

(a) Reasons Other Than Without Cause . If Lions Gate or Burns, as applicable, terminates this Agreement pursuant to Section 11, subsections (a) — (e) above, and except as provided in Section 8(c)(ii), Lions Gate shall have no further obligation to pay Burns any compensation of any kind other than the Accrued Obligations.

Notwithstanding the foregoing, if on the date of death or termination for Disability pursuant to Section 11, subsections (b) and (c), respectively, the volume-weighted average median stock price of Lions Gate’s stock for the immediately prior four (4) month (or longer) period is US$13.00, $16.00, or $19.00 per share or greater, then the applicable Stock Price Bonus shall be paid in full if it otherwise becomes payable in accordance with the conditions set forth in Section 5 above applied without regard to the early termination of this Agreement. If on the date of death or termination for Disability the volume-weighted average median stock price of Lions Gate’s stock for the immediately prior period of less than four (4) months is US$13.00, $16.00, or $19.00 per share or greater, then a pro-rated share of the applicable Stock Price Bonus shall be paid if it otherwise becomes payable in accordance with the conditions set forth in Section 5 above applied without regard to the early termination of this Agreement (i.e., if the target was achieved over the two (2) month period immediately prior to termination for death or Disability and four (4) months later the target was achieved for the whole six (6) month period, then Burns (or his estate, if applicable) would receive one third (1/3) of the applicable Stock Price Bonus). Any Stock Price Bonus or portion thereof that becomes payable pursuant to this paragraph shall be paid within five (5) business days following the completion of the applicable six-month period.

Notwithstanding the foregoing, Lions Gate shall have no obligation to pay any Stock Price Bonus, even if accrued, if this Agreement is terminated based on Burns’ commission of a material fraud against Lions Gate; provided, however, any such material fraud shall have been determined by binding arbitration as set forth in Section 19(f) below.

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(b) Without Cause . If Lions Gate terminates Burns’ employment without Cause pursuant to Section 11(f), then Burns shall be entitled to receive (A) subject to Section 13(b), a lump sum severance payment within 10 days following his Separation from Service in the amount of 50% of the balance of the Base Salary through September 1, 2011 to the extent not theretofore paid; and (B) any Accrued Obligations. In addition, (i) any then-outstanding and unvested portion of the Time Vesting RSUs and any then-outstanding and unvested portion of the Option shall immediately and fully vest and become exercisable, and (ii) the Performance Vesting RSUs that are eligible to vest on the next Performance Vesting Date after the date of such termination (but not including any Performance Vesting RSUs that were eligible to vest on any preceding Performance Vesting Date and did not vest on such date) shall immediately and fully vest. Any Performance Vesting RSUs that have not vested after giving effect to the foregoing sentence shall immediately terminate. The foregoing amounts shall not be payable if Burns’ termination is in connection with a Change of Control, but in such event Burns shall be paid in accordance with Section 8(c)(i).

If Burns’ employment with Lions Gate is terminated pursuant to Sections 8(c), 11(a) — (c) or 11(e) — (f) above, Burns shall have no obligation to mitigate and Lions Gate shall have no right to offset any income thereafter received by Burns against Lions Gate’s payment obligations to him.

13. Section 409A .

(a) It is intended that any amounts payable under this Agreement and any exercise of authority or discretion hereunder by Lions Gate or Burns shall comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) (“Section 409A”) so as not to subject Burns to payment of any interest or additional tax imposed under Section 409A. To the extent that any amount payable under this Agreement would trigger the additional tax imposed by Section 409A, this Agreement shall be construed and interpreted in a manner to avoid such additional tax yet preserve (to the nearest extent reasonably possible) the intended benefit payable to Burns.

(b) Notwithstanding any other provision herein, if Burns is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Burns’ Separation from Service, Burns shall not be entitled to any payment or benefit pursuant to Section 8(c) or 12(b) above until the earlier of (i) the date which is six (6) months after his or her Separation from Service for any reason other than death, or (ii) the date of Burns’ death. Any amounts otherwise payable to Burns upon or in the six (6) month period following Burns’ Separation from Service that are not so paid by reason of this paragraph shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after Burns’ Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of Burns’ death). The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.

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Section 12 are taxable to Burns, any reimbursement payment due to Burns pursuant to any such provision shall be paid to Burns on or before the last day of Burns’ taxable year following the taxable year in which the related expense was incurred. The benefits and reimbursements pursuant to such provisions are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Burns receives in one taxable year shall not affect the amount of such benefits or reimbursements that Burns receives in any other taxable year.

14. Indemnification . Except with respect to claims resulting from Burns’ willful misconduct or acts outside the scope of his employment hereunder, Burns shall be indemnified by Lions Gate (whether during or after the Term) in respect of all claims arising from or in connection with his position or services as an officer of Lions Gate to the maximum extent permitted in accordance with Lions Gate’s Certificate of Incorporation, its By-Laws and under applicable law, and shall be covered by Lions Gate’s applicable directors and officers insurance policy.

15. Company Policies . Burns shall abide by the provisions of all policy statements, including without limitation any conflict of interest policy statement, of Lions Gate or adopted by Lions Gate from time to time during the Term and furnished to Burns in writing or of which he has notice.

16. Non-Solicitation . Burns shall not, during the Term and for a period of one (1) year thereafter, directly or indirectly, induce or attempt to induce any employee of Lions Gate or its affiliates, to leave Lions Gate or its affiliates or to render employment services for any other person, firm or corporation.

17. Property of Lions Gate . Burns acknowledges that the relationship between the parties hereto is exclusively that of employer and employee and that Lions Gate’s obligations to him are exclusively contractual in nature. Lions Gate and/or its affiliates shall be the sole owner or owners of all interests and proceeds of Burns’ services hereunder, including without limitation, all ideas, concepts, formats, suggestions, developments, arrangements, designs, packages, programs, scripts, audio visual materials, promotional materials, photography and other intellectual properties and creative works which Burns may prepare, create, produce or otherwise develop in connection with and during his employment hereunder, including without limitation, all copyrights and all rights to reproduce, use, authorize others to use and sell such properties or works at any time or place for any purpose, free and clear of any claims by Burns (or anyone claiming under him) of any kind or character whatsoever (other than Burns’ right to compensation hereunder). Burns shall have no right in or to such properties or works and shall not use such properties or works for his own benefit or the benefit of any other person. Burns shall, at the reasonable request of Lions Gate, execute such assignments, certificates, applications, filings, instruments or other documents consistent herewith as Lions Gate may from time to time reasonably deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend its right, title and interest in or to such properties or works. Burns’ assignment of rights in this paragraph does not apply to any invention which fully qualifies under Section 2870 of the California Labor Code. The parties further acknowledge that Burns is the author and owner of a screenplay currently entitled “Inside Information” and Lions Gate agrees

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that it claims no ownership interest therein. Burns agrees that Lions Gate shall have the right of first negotiation and last refusal concerning “Inside Information.”

18. Confidential Information . All memoranda, notes, records and other documents made or compiled by Burns, or made available to him during his employment with Lions Gate concerning the business or affairs of Lions Gate or its affiliates shall be Lions Gate’s property and shall be delivered to Lions Gate on the termination of this Agreement or at any other time on request from Lions Gate. Burns shall keep in confidence and shall not use for himself or others, or divulge to others, any information concerning the business or affairs of Lions Gate or its affiliates which is not otherwise publicly available and which is obtained by Burns as a result of his employment, including without limitation, trade secrets or processes and information reasonably deemed by Lions Gate to be proprietary in nature, including without limitation, financial information, programming or plans of Lions Gate or its affiliates, unless disclosure is permitted by Lions Gate or required by law or legal process.

19. Miscellaneous .

(a) Governing Law . This Agreement shall be governed and construed in accordance with the laws of the State of California without regard to principles of conflict of laws.

(b) Amendments . This Agreement may be amended or modified only by a written instrument executed by each of the parties hereto.

(d) Entire Agreement . This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements, negotiations and understandings of the parties in connection therewith (including, without limitation, the Prior Agreement, except as expressly provided herein). Notwithstanding the foregoing, except as expressly set forth herein, the terms and conditions of the agreements that evidence equity-based awards granted by Lions Gate to Burns that are outstanding as of the Effective Date are outside of the scope of the preceding provisions of this Section 19(d) and continue in effect.

(e) Successors and Assigns . This Agreement is binding upon the parties hereto and their respective successors, assigns, heirs and personal representatives. Except as specifically provided herein, neither of the parties hereto may assign the rights and duties of this Agreement or any interest therein, by operation of law or otherwise, without the prior written consent of the other party, except that, without such consent, Lions Gate shall assign this Agreement provided that it secures the assumption thereof by any successor to all or substantially all of its stock, assets and business by dissolution, merger, consolidation, transfer of assets or otherwise.

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(f) Arbitration . In exchange for the benefits of the speedy, economical and impartial dispute resolution procedure of arbitration, Lions Gate and Burns, with the advice and consent of their selected counsel, choose to forego their right to resolution of their disputes in a court of law by a judge or jury, and instead elect to treat their disputes, if any, pursuant to the Federal Arbitration Act and/or California Civil Procedure Code §§ 1281 et seq .

(i) Burns and Lions Gate agree that any and all claims or controversies whatsoever brought by Burns or Lions Gate, arising out of or relating to this Agreement, Burns’ employment with Lions Gate, or otherwise arising between Burns and Lions Gate, will be settled by final and binding arbitration in accordance with the applicable rules and procedures of Judicial Arbitration and Mediation Services, Inc. (“JAMS”). This includes all claims whether arising in tort or contract and whether arising under statute or common law. Such claims may include, but are not limited to, those relating to this Agreement, wrongful termination, retaliation, harassment, or any statutory claims under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Fair Employment and Housing Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, or similar Federal or state statutes. In addition, any claims arising out of the public policy of California, any claims of wrongful termination, employment discrimination, retaliation, or harassment of any kind, as well as any claim related to the termination or non-renewal of this Agreement shall be arbitrated under the terms of this Agreement. The obligation to arbitrate such claims will survive the termination of this Agreement. Lions Gate shall be responsible for all costs of the arbitration services, including the fees and costs of the arbitrator and court reporter fees, unless Burns wishes to share such costs voluntarily. To the extent permitted by law, the hearing and all filings and other proceedings shall be treated in a private and confidential manner by the arbitrator and all parties and representatives, and shall not be disclosed except as necessary for any related judicial proceedings.

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20. Limit on Benefits .

(a) Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, Burns under any other Lions Gate plan or agreement (such payments or benefits are collectively referred to as the “Benefits” for purposes of this Section 20) would be subject to the excise tax (the “Excise Tax”) imposed under Section 4999 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), the Benefits shall be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in Burns retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if Burns received all of the Benefits (such reduced amount is referred to hereinafter as the “Limited Benefit Amount”). In such case, the Benefits shall be reduced or eliminated by first reducing or eliminating cash severance payments, then by reducing or eliminating other cash payments, then by reducing or eliminating those payments or benefits which are not payable in cash, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as hereinafter defined). Any notice given by Burns pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing Burns’ rights and entitlements to any benefits or compensation.

(b) A determination as to whether the Benefits shall be reduced to the Limited Benefit Amount pursuant to this Agreement and the amount of such Limited Benefit Amount shall be made by Lions Gate’s independent public accountants or another certified public accounting firm of national reputation designated by Lions Gate (the “Accounting Firm”). Lions Gate and Burns shall use their reasonable efforts to cause the Accounting Firm to provide its determination (the “Determination”), together with detailed supporting calculations and documentation to Lions Gate and Burns within five (5) days of the date of termination of Burns’ employment, if applicable, or such other time as requested by Lions Gate or Burns (provided Burns reasonably believes that any of the Benefits may be subject to the Excise Tax), and if the Accounting Firm determines that no Excise Tax is payable by Burns with respect to any Benefits, Lions Gate and Burns shall use their reasonable efforts to cause the Accounting Firm to furnish Burns with an opinion reasonably acceptable to Burns that no Excise Tax will be imposed with respect to any such Benefits. Unless Burns provides written notice to Lions Gate within ten (10) days of the delivery of the Determination to Burns that he disputes such Determination, the Determination shall be binding, final and conclusive upon Lions Gate and Burns.

21. Severability . Each section, subsection and lesser portion of this Agreement constitutes a separate and distinct undertaking, covenant and/or provision hereof. In the event that any provision of this Agreement shall finally be determined to be unlawful or unenforceable, such provision shall be deemed to be severed from this Agreement, but every other provision shall remain in full force and effect.

22. Construction . Each party has cooperated in the drafting and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be

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construed against any party on the basis that the party was the drafter.

23. Legal Counsel . In entering this Agreement, the parties represent that they have relied upon the advice of their attorneys, who are attorneys of their own choice, and that the terms of this Agreement have been completely read and explained to them by their attorneys, and that those terms are fully understood and voluntarily accepted by them.

24. Waiver . No waiver of any breach of any term or provision of this Agreement shall be construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach.

25. Execution . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Photographic and facsimile copies of such signed counterparts may be used in lieu of the originals for any purpose.

26. Notices . All notices to be given pursuant to this Agreement shall be effected either by mail or personal delivery in writing as follows:


		Lions Gate :

		Lions Gate Entertainment
		2700 Colorado Avenue, Suite 200
		Santa Monica, California 90404
		Attention: General Counsel

		Burns :

		Michael Burns
		c/o Lions Gate Entertainment
		2700 Colorado Avenue, Suite 200
		Santa Monica, California 90404

[ Remainder of page intentionally left blank ]

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In witness whereof, the parties hereto have executed this Agreement as of the date first above written.


		“LIONS GATE”

		LIONS GATE ENTERTAINMENT CORP. ,

		By:		Wayne Levin
		Its:		Executive Vice President and General Counsel

		“BURNS”

		/s/ Michael Burns

		Michael Burns

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Exhibit 10.59

December 15, 2008

Mr. Steve Beeks

Re:

Amended and Restated Employment Agreement

Dear Mr. Beeks:

On behalf of Lions Gate Films Inc. (the “Company”), this letter is to confirm the terms of your employment by the Company. We refer to you herein as “Employee.” The employment agreement entered into as of March 28, 2007 between Employee and the Company (the “Prior Employment Agreement”), is hereby amended and restated in its entirety. The terms of Employee’s employment are as follows:

1. TERM

(a) The term of this agreement (this “Agreement”) will begin April 1, 2007 (the “Effective Date”) and end April 1, 2011, subject to early termination as provided in this Agreement (the “Term”). During the Term of this Agreement, Employee will serve as President and Chief Operating Officer, subject to the following:

(i) in the event that the Company hires a senior executive with responsibilities extending over Lions Gate Films, the Company may change Employee’s title to Co-Chief Operating Officer;

(ii) in the event that the Company’s current CEO takes on the title of Chief Operating Officer as the result of a merger or acquisition or other transaction, Employee agrees to relinquish the title of Chief Operating Officer; and

(iii) in the event that there is material growth of the Company, by means of strategic transactions or otherwise, the Company, subject to good faith consultation with Employee, may change his title and responsibilities without breach of this Agreement; provided, however, that the new title will not be less than President of a division which encompasses more than Home Entertainment.

Employee shall report to the CEO of the Company, currently Jon Feltheimer, or his/her designee, consistent with the provisions above. Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the motion picture and home video industries and as may be reasonably and lawfully requested by the Company.

(b) So long as this Agreement shall continue in effect, Employee shall devote

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Employee’s full business time, energy and ability exclusively to the business, affairs and interests of the Company and matters related thereto, shall use Employee’s best efforts and abilities to promote the Company’s interests, and shall perform the services contemplated by this Agreement in accordance with policies established by the Company.

2. COMPENSATION

(a) Salary . The following base salary will be paid to Employee during the Term of this Agreement:

	(i)		April 1, 2007 through March 31, 2008 — the rate of SIX HUNDRED THOUSAND DOLLARS ($600,000.00) per year (“Base Salary — Period 1”), payable in accordance with the Company’s normal payroll practices in effect.

	(ii)		April 1, 2008 through the end of the Term — the rate of SEVEN HUNDRED FIFTY THOUSAND DOLALRS ($750,000.00) per year (“Base Salary — Period 2”), payable in accordance with the Company’s normal payroll practices in effect.

(b) Payroll . Nothing in this Agreement shall limit the Company’s right to modify its payroll practices, as it deems necessary.

(i)

EBITDA Bonus. During the Term, Employee shall be entitled to receive an annual bonus on the Company attainment of an EBITDA target (the “E Target”) if such E Target is attained in the following amounts:

	(A)		If the Company attains at least 105% of the E Target, Employee shall receive 12.5% of his Base Salary;

	(B)		If the Company attains at least 115% of the E Target, Employee shall receive an additional 12.5% of his Base Salary.

For each fiscal year of the Term, the Company shall designate the upcoming year’s E Target after it is approved by the Company’s Board of Directors, on or before April 1 of the applicable fiscal year, or as soon thereafter as approved by the Board of Directors, and it shall notify Employee in writing of such E Target for the fiscal year to which the E Target applies. The E Target shall not be greater than the E Target for other Presidents receiving a similar bonus based on an EBITDA target. The fiscal year commences April 1 of each year. The Company shall establish a reserve

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amount for uncollectible receivables equal to 2% (the “E Reserve”). The E Target shall include the E Reserve. For each portion of a fiscal year that Employee is employed by Company, Employee shall be entitled to a pro-rata portion of the E Bonus, if and when earned. Any bonus payable to Employee hereunder shall be paid within thirty (30) days following the end of the audit for the applicable fiscal year and in all events within the “short-term deferral” period provided under Treasury Regulation Section 1.409A-1(a)(4) (generally within two and one-half months after the end of the fiscal year for which the bonus is paid).

(ii)

During the Term, Employee shall be entitled to receive performance bonuses at the full discretion of the CEO of the Company. Employee must be employed with the Company through the last day of the bonus year to be eligible to receive a discretionary performance bonus for that year, and any such bonus will be paid within the “short-term deferral” period provided under Treasury Regulation Section 1.409A-1(a)(4).

3. BENEFITS

As an employee of the Company, Employee will continue to be eligible to participate in all benefit plans to the same extent as other salaried employees subject to the terms of such plans.

4. VACATION AND TRAVEL

(a) Employee shall be entitled to take paid time off without a reduction in salary, subject to (i) the approval of the CEO, which shall not be unreasonably withheld, and (ii) the demands and requirements of Employee’s duties and responsibilities under this Agreement. There are no paid vacation days.

(b) Employee will be eligible to be reimbursed for any business expenses in accordance with the Company’s current Travel and Entertainment policy.

(c) In addition, Employee shall be entitled to (i) business class travel for flights in excess of four (4) hours; (ii) all customary “perqs” of division heads within the Company; (iii) a cell phone, which may be expensed; (iv) a reserved parking space; and (v) reimbursement for all expenses reasonably incurred in connection with his employment.

(d) The Company reserves the right to modify, suspend or discontinue any and all of the above referenced benefits, plans, practices, policies and programs (including those in Section 3) at any time (whether before or after termination of employment) without notice to or recourse by Employee so long as action is taken in general with respect to other similarly situated persons and does not single out Employee.

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5. STOCK

(a) Time-Based Grant .

	(i)		The Company shall request that the Compensation Committee of Lions Gate (“CCLG”) authorize and grant Employee 212,500 restricted share units (“Time-Based Grant”) of Lions Gate Entertainment Corp. in accordance with the terms and conditions of the existing and/or future Employee Stock Plan (collectively, the “Plan”). Employee acknowledges that this Time-Based Grant of stock is subject to the approval of the CCLG. The award date (“Award Date”) shall be the date of the board meeting when the Time-Based Grant is approved.

	(ii)		Vesting . Notwithstanding Section 5(d) and (e), and subject to Section 5(a)(iii) below, the Time-Based Grant shall vest as follows:

	(A)		the first 53,125 restricted share units of the Time-Based Grant will vest on the 1 ^st anniversary of the Award Date;

	(B)		an additional 53,125 restricted share units of the Time-Based Grant will vest on the 2 ^nd anniversary of the Award Date;

	(C)		an additional 53,125 restricted share units of the Time-Based Grant will vest on the 3 ^rd anniversary of the Award Date;

	(D)		the final 53,125 restricted share units of the Time-Based Grant will vest on the 4th anniversary of the Award Date.

(iii)

Continuance of Employment . The vesting schedule in Section 5(a)(ii) above requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Time-Based Grant and the rights and benefits under this Agreement.

(b) Performance Grant .

(i)

The Company shall request that the CCLG authorize and grant Employee 212,500 restricted share units (“Performance Grant” and, together with the Time-Based Grant, the “Grants”) of Lions Gate Entertainment Corp. in accordance with the Plan. Employee acknowledges that this Performance Grant of stock is subject to the approval of the CCLG.

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(ii)

Vesting . Notwithstanding Section 5(d) and (e), and subject to Section 5(b)(iii) below, the Performance Grant shall be eligible to vest based on the following schedule (each, a “Performance Vesting Date”):

	(A)		the first 53,125 restricted share units of the Performance Grant shall be eligible to vest on March 31, 2008;

	(B)		an additional 53,125 restricted share units of the Performance Grant shall be eligible to vest on March 31, 2009;

	(C)		an additional 53,125 restricted share units of the Performance Grant shall be eligible to vest on March 31, 2010;

	(D)		the final 53,125 restricted share units of the Performance Grant shall be eligible to vest on March 31, 2011.

The vesting of the Performance Grant on such Performance Vesting Dates shall be subject to satisfaction of annual Company performance targets approved in advance by the CCLG for the twelve (12) month period ending on such Performance Vesting Date. The Performance Grant shall vest on a sliding scale basis if the Company’s performance targets have not been fully met for a particular year. For purpose of example only, if seventy-five percent (75%) of Company’s targets have not been met for a particular year, seventy-five percent (75%) of the Performance Grant for that year would vest. Notwithstanding the foregoing, the CCLG may, in its sole discretion, provide that any or all of the Performance Grant scheduled to vest on any such Performance Vesting Date shall be deemed vested as of such date even if the applicable performance targets are not met. Furthermore, the CCLG may, in its sole discretion, provide that any of the Performance Grant scheduled to vest on any such Performance Vesting Date that do not vest because the applicable performance targets are not met may vest on any future Performance Vesting Date if the performance targets applicable to such Performance Vesting Date are exceeded.

(iii)

Continuance of Employment . The vesting schedule in Section 5(b)(ii) above requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Performance Grant and the rights and benefits under this Agreement.

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	(i)		The Company shall also request that the CCLG authorize and grant Employee the right (the “Option”) to purchase 425,000 common shares of Lions Gate Entertainment Corp. in accordance with the Plan. Employee acknowledges that this Option grant of stock is subject to the approval of the CCLG. The award date (“Option Award Date”) shall be the date of the board meeting when the Option is approved.

	(ii)		Vesting . Notwithstanding Section 5(d) and (e), and subject to Section 5(c)(iii) below, the Option shall vest as follows:

	(A)		the Option to purchase 106,250 common shares will vest on the 1 ^st anniversary of the Option Award Date;

	(B)		the Option to purchase an additional 106,250 common shares will vest on the 2 ^nd anniversary of the Option Award Date;

	(C)		the Option to purchase an additional 106,250 common shares will vest on the 3 ^rd anniversary of the Option Award Date;

	(D)		the Option to purchase the final 106,250 common shares will vest on the 4 ^th anniversary of the Option Award Date.

(iii)

Continuance of Employment . The vesting schedule in Section 5(c)(ii) above requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Option and the rights and benefits under this Agreement.

(d) Acceleration of Grants and Options upon Death of Employee. In the event that Employee dies during the Term of this Agreement, all Grants and Options granted pursuant to Sections 5(a)-(c) of this Agreement shall accelerate and immediately become fully vested.

(e) Change of Control.

	(i)		If a Change of Control occurs during the Term of this Agreement and concludes on or after April 1, 2008, all Grants and Options granted pursuant to Sections 5(a)-(c) of this Agreement shall accelerate and immediately become fully vested.

	(ii)		For the purposes of this Agreement, “Change of Control” shall mean:

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	(A)		if any person, other than a trustee or other fiduciary holding securities of Lions Gate Entertainment Corp. (“LGEC”) under an employee benefit plan of LGEC, becomes the beneficial owner, directly or indirectly, of securities of LGEC representing 33% or more of the outstanding shares of common stock of LGEC as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of LGEC;

	(B)		if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of LGEC, there is a sale or disposition of 33% or more of LGEC’s assets (or consummation of any transaction, or series of related transactions, having similar effect);

	(C)		if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of LGEC, there occurs a change or series of changes in the composition of LGEC as a result of which half or less than half of the directors are incumbent directors;

	(D)		if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of LGEC, a shareholder or group of shareholders acting in concert obtain control of 33% or more of the outstanding shares;

	(E)		if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of LGEC, a shareholder or group of shareholders acting in concert obtain control of half of the Board;

	(F)		if there is a dissolution or liquidation of LGEC; or

	(G)		if there is any transaction or series of related transactions that has the substantial effect of any or more of the foregoing.

(f) Effect on Prior Grants . All Grants and Options provided for in Sections 5(a)-(c) above are in addition to, and not in lieu of, any and all grants and options provided for in any and all previous agreements between Employee and Company (other than the Prior Employment Agreement, as defined herein). Any and all grants and options granted under

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such prior agreements shall be unaffected by this Agreement.

6. HANDBOO K

Employee agrees that the Company Employee Handbook outlines other policies, which will apply to Employee’s employment, and Employee acknowledges receipt of such handbook. Please note, however, that the Company retains the right to revise, modify or delete any policy or benefit plan it deems appropriate.

7. TERMINATION

(a) This Agreement shall terminate upon the happening of any one or more of the following events:

	(i)		The mutual written agreement between the Company and Employee;

	(ii)		The death of Employee;

	(iii)		Employee’s having become so physically or mentally disabled as to be incapable, even with a reasonable accommodation, of satisfactorily performing Employee’s duties hereunder for a period of ninety (90) days or more, provided that Employee has not cured disability within ten (10) days of written notice;

	(iv)		The determination on the part of the Company that “cause” exists for termination of this Agreement, with “cause” being defined as any of the following:

	(A)		Employee’s conviction of a felony or plea of nolo contendere to a felony, except in connection with a traffic violation or traffic accident;

	(B)		Employee’s commission, by act or omission, of any material act of dishonesty in the performance of Employee’s duties hereunder;

	(C)		material breach of this Agreement by Employee; or

	(D)		any act of material misconduct by Employee having a substantial adverse effect on the business or reputation of the Company, which shall include, but not be limited to theft, fraud or other illegal conduct, refusal or unwillingness to perform employment duties, sexual harassment, violation of any fiduciary duty, and violation of any duty of loyalty;

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			Provided, however, that prior to terminating Employee’s employment for “cause,” the Company shall provide Employee with written notice of the grounds for the proposed termination. If the grounds for termination are subject to cure, the Employee shall have fifteen (15) days after receiving such notice in which to cure such grounds to the extent such cure is possible. If cure is not possible or Employee has failed to cure, Employee’s employment shall terminate upon the 15th day following notice of termination.

	(v)		The Employee is terminated “without cause.” If Company elects to terminate Employee “without cause,” it must provide Employee with sixty (60) days prior written notice. Termination “without cause” shall be defined as the Employee being terminated by the Company for any reason other than as set forth in Sections 7(a)(i)-(iv) above. In the event of a termination “without cause,” Employee shall be entitled to receive a severance payment equal to 50% of the amount of the Base Salary which Employee would have been entitled to receive for the period commencing on the date of such termination and ending on the last day of the Term had Employee continued to be employed with the Company through such date, but in no event less than the greater of either (i) six (6) months’ Base Salary at the monthly rate in effect on the date of such termination, or (ii) the amount Employee would receive from the Company’s severance policy for non-contract employees that is currently in effect at the time of termination, such payment to be made, subject to Section 13(b), in cash in a lump sum as soon as practicable after (and in all events not more than two and one-half (2 ¹ / 2 ) months after) the date of Employee’s Separation from Service with the Company. The Company’s payment of the amounts described above in this Section 7(a)(v) shall relieve the Company of any and all obligations to Employee. As used herein, a “Separation from Service” occurs when Employee dies, retires, or otherwise has a termination of employment with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.

(b) In the event that this Agreement is terminated pursuant to Sections 7(a)(i)-(iv) above, neither the Company nor Employee shall have any remaining duties or obligations hereunder, except that (i) the Company shall pay to Employee, only such compensation as is earned under Section 2 plus any and all business expenses incurred but not paid as of the date of Employee’s termination of employment and (ii) Employee shall continue to be bound by Sections 9, 10, 11, 12, 13, 15 and 16. If this Agreement is terminated for any reason, in fact, Sections 9, 10, 11, 12, 13, 15 and 16 shall survive and be binding upon Employee following his termination of employment.

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(c) Notwithstanding the foregoing, in the event of a Change of Control, as defined in Section 5(e)(ii), if Employee is terminated within six (6) months of the date of the Change of Control, then Employee shall receive the greater of either (i) 50% of the amount of the Base Salary which Employee would have been entitled to receive for the period commencing on the date of such termination and ending on the last day of the Term had Employee continued to be employed with the Company through such date or (ii) ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00), such payment to be made, subject to Section 13, in cash in a lump sum as soon as practicable after (and in all events not more than two and one-half (2 ¹ / 2 ) months after) the date of Employee’s Separation from Service with the Company. The Company’s payment of the amounts described above in this Section 7(c) shall relieve the Company of any and all obligations to Employee.

8. EXCLUSIVITY AND SERVICE

Employee’s services shall be exclusive to the Company during the Term. Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the motion picture and home video industries and as may be reasonably requested by the Company. Employee hereby agrees to comply with all reasonable requirements, directions and requests, and with all reasonable rules and regulations made by the Company in connection with the regular conduct of its business. Employee further agrees to render services during Employee’s employment hereunder whenever, wherever and as often as the Company may reasonably require in a competent, conscientious and professional manner, and as instructed by the Company in all matters, including those involving artistic taste and judgment, but there shall be no obligation on the Company to cause or allow Employee to render any services, or to include all or any of Employee’s work or services in any motion picture or other property or production.

9. INTELLECTUAL PROPERTY

(a) Employee agrees that the Company shall own all rights of every kind and character throughout the universe, in perpetuity to any material and/or idea suggested or submitted by Employee or suggested or submitted to Employee by a third party that occurs during the Term or any other period of employment with the Company, its parent, affiliates, or subsidiaries that are within the scope of Employee’s employment and responsibilities hereunder. Employee agrees that during the Term and any other period of employment with the Company, its parent, affiliates, or subsidiaries, the Company shall own all other results and proceeds of Employee’s services that are related to Employee’s employment and responsibilities. Employee shall promptly and fully disclose all intellectual property generated by the Employee during the Term and any other period of employment with the Company, its parent, affiliates, or subsidiaries in connection with Employee’s employment hereunder.

(b) All copyrightable works that Employee creates in connection with Employee’s obligations under this Agreement and any other period of employment with the Company, its parent, affiliates, or subsidiaries shall be considered “work made for hire” and therefore the property of the Company. To the extent any work so produced or other intellectual property so generated by Employee is not deemed to be a “work made for hire,” Employee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company)

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Employee’s full right, title and interest in and to all such works and other intellectual property. Employee agrees to execute any and all applications for domestic and foreign copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the intellectual property to the Company and to permit the Company to enforce any copyrights or other proprietary rights to the intellectual property. Employee further agrees not to charge the Company for time spent in complying with these obligations. This Section 9 shall apply only to that intellectual property which related at the time of conception to the Company’s then current or anticipated business or resulted from work performed by Employee for the Company. Employee hereby acknowledges receipt of written notice from the Company pursuant to California Labor Code Section 2872 that this Agreement (to the extent it requires an assignment or offer to assign rights to any invention of Executive) does not apply to an invention which qualifies fully under California Labor Code Section 2870.

10. ASSIGNMENT AND DELEGATION

Employee shall not assign any of Employee’s rights or delegate any of Employee’s duties granted under this Agreement. Any such assignment or delegation shall be deemed void ab initio .

11. TRADE SECRETS

The parties acknowledge and agree that during the Term of this Agreement and in the course of the discharge of Employee’s duties hereunder and at any other period of employment with the Company, its parent, affiliates, or subsidiaries, Employee shall have and has had access to information concerning the operation of the Company and its affiliated entities, including without limitation, financial, personnel, sales, planning and other information that is owned by the Company and regularly used in the operation of the Company’s business and (to the extent that such confidential information is not subsequently disclosed) that this information constitutes the Company’s trade secrets. Notwithstanding the above, the parties acknowledge and agree that trade secrets shall not include any information that Employee can demonstrate (i) was publicly available at the time of its disclosure to Employee; (ii) was already in Employee’s possession at the time of disclosure; (iii) was rightfully received by Employee from a third party not subject to obligations of confidentiality; or (iv) was independently developed by Employee without use of any trade secrets.

Employee agrees that Employee shall not disclose any such trade secrets, directly or indirectly, to any other person or use them in any way, either during the Term of this Agreement or at any other time thereafter, except as is required in the course of Employee’s employment for the Company, as required by applicable law or court order, or if authorized in writing by the Company. Employee shall not use any such trade secrets in connection with any other employment and/or business opportunities following the Term. In addition, Employee hereby expressly agrees that Employee will not disclose any confidential matters of the Company that are not trade secrets prior to, during or after Employee’s employment including the specifics of this Agreement. Employee shall not use any such confidential information in connection with any other employment and/or business opportunities following the Term. Upon termination of

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Employee’s employment with Company, Employee shall deliver to Company all documents, computer disks or computers, records, notebooks, work papers, and all similar material containing any of the foregoing trade secrets, whether prepared by Employee, the Company or anyone else. In addition, in order to protect the Confidential Information, Employee agrees that during the Term and for a period of two (2) years thereafter, Employee will not, directly or indirectly, induce or entice any other executive or employee of the Company to leave such employment.

12. ARBITRATION

Any dispute, controversy or claim arising out of or in respect to this Agreement (or its validity, interpretation or enforcement), the employment relationship or the subject matter hereof shall at the request of either party be submitted to and settled by binding arbitration conducted before a single arbitrator in Los Angeles in accordance with the Federal Arbitration Act, to the extent that such rules do not conflict with any provisions of this Agreement. Said arbitration shall be under the jurisdiction of Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in Los Angeles, California. All such actions must be brought within the statute of limitations period applicable to the claim as if that claim were being filed with the judiciary or forever be waived. Failure to institute an arbitration proceeding within such period shall constitute an absolute bar to the institution of any proceedings respecting such controversy or claim, and a waiver thereof. The arbitrator shall have the authority to award damages and remedies in accordance with applicable law. Any award, order, or judgment pursuant to such arbitration shall be deemed final and binding and may be entered and enforced in any state or federal court of competent jurisdiction. Each party agrees to submit to the jurisdiction of any such court for purposes of the enforcement of any such award, order, or judgment. Company shall pay for the administrative costs of such hearing and proceeding.

13. SECTION 409A

(a) It is intended that any amounts payable under this Agreement and any exercise of authority or discretion hereunder by the Company or Employee shall comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) (“Section 409A”) so as not to subject Employee to payment of any interest or additional tax imposed under Section 409A. To the extent that any amount payable under this Agreement would trigger the additional tax imposed by Section 409A, this Agreement shall be construed and interpreted in a manner to avoid such additional tax yet preserve (to the nearest extent reasonably possible) the intended benefit payable to Employee.

(b) Notwithstanding any other provision herein, if Employee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Employee’s Separation from Service, Employee shall not be entitled to any payment or benefit pursuant to Section 7(a)(v) or 7(c) above until the earlier of (i) the date which is six (6) months after his or her Separation from Service for any reason other than death, or (ii) the date of Employee’s death. Any amounts otherwise payable to Employee upon or in the six (6) month period following Employee’s Separation from Service that are not so paid by reason of this paragraph shall be paid (without interest) as soon as practicable (and in all events within thirty

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(30) days) after the date that is six (6) months after Employee’s Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of Employee’s death). The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.

(c) Any reimbursements made to Employee hereunder will be made in accordance with the Company’s reimbursement policies, practices and procedures in effect from time to time. To the extent that any reimbursements pursuant to Section 4 are taxable to Employee, any reimbursement payment due to Employee pursuant to such provision shall be paid to Employee on or before the last day of Employee’s taxable year following the taxable year in which the related expense was incurred. The benefits and reimbursements pursuant to such provision are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Employee receives in one taxable year shall not affect the amount of such benefits or reimbursements that Employee receives in any other taxable year.

14. NOTICES

All notices to be given pursuant to this Agreement shall be effected either by mail or personal delivery in writing as follows:

Company :

Lions Gate Films Inc.
2700 Colorado Avenue, Suite 200
Santa Monica, California 90404
Attn: General Counsel

Employee :

Steve Beeks
Lions Gate Films Inc.
2700 Colorado Avenue, Suite 200
Santa Monica, California 90404

Courtesy Copy :

15. WAIVER

Failure to require compliance with any provision or condition provided for under this Agreement at any one time, or several times, shall not be deemed a waiver or relinquishment of

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such provision or condition at any other time.

16. INTEGRATION, AMENDMENT, SEVERABILITY, AND FORUM

(a) This Agreement expresses the binding and entire agreement between Employee and the Company and shall replace and supersede all prior arrangements and representations, either oral or written, as to the subject matter hereof (including, without limitation, the Prior Employment Agreement, except as expressly provided herein).

(b) All modifications or amendments to the Agreement must be made in writing and signed by both parties.

(c) If any portion of this Agreement is held unenforceable under any applicable statute or rule of law then such portion only shall be deemed omitted and shall not affect the validity of enforceability of any other provision of this Agreement.

(d) This Agreement shall be governed by the laws of the State of California. The state and federal courts (or arbitrators appointed as described herein) located in Los Angeles, California shall be the sole forum for any action for relief arising out of or pursuant to the enforcement or interpretation of this Agreement. Each party to this Agreement consents to the personal jurisdiction and arbitration in such forum and courts and each party hereto Covenants not to, and waives any right to, seek a transfer of venue from such jurisdiction on any grounds.

[ Remainder of page intentionally left blank ]

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Please acknowledge your confirmation of the above terms by signing below where indicated and returning this letter to me. If you have any questions relating to the matters described in this letter, please call at (310) 255-XXXX.

Very truly yours,

LIONS GATE FILMS, INC.


By:		/s/ Wayne Levin Wayne Levin
		Executive Vice President and General Counsel

AGREED AND ACCEPTED


By:		/s/ Steve Beeks Steve Beeks

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Exhibit 10.60

December 15, 2008

Mr. James Keegan

Re:

Amended and Restated Employment Agreement

Dear Mr. Keegan:

On behalf of Lions Gate Films Inc. (the “Company” or “Lions Gate”), this letter is to confirm the terms of your employment by the Company. We refer to you herein as “Employee.” The employment agreement entered into as of February 21, 2006, between Employee and the Company (the “Prior Employment Agreement”), is hereby amended and restated in its entirety. The terms of Employee’s employment from the Effective Date (as defined below) are as follows:

1. The term of this agreement (this “Agreement”) will begin April 16, 2006 (the “Effective Date”) and end April 15, 2008, subject to early termination as provided in this Agreement (the “Term”). During the Term of this Agreement Employee will serve as Chief Financial Officer. Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the motion picture industry and as may be reasonably requested by Company.

The Company may, at its sole discretion, extend the Term of this Agreement for an additional year, commencing April 16, 2008 and ending April 15, 2009 (the “Option Year”) by giving notice to Employee of its election to extend this Agreement at least ninety (90) days before that date.

So long as this Agreement shall continue in effect, Employee shall devote Employee’s full business time, energy and ability exclusively to the business, affairs and interests of the Company and matters related thereto, shall use Employee’s best efforts and abilities to promote the Company’s interests and shall perform the services contemplated by this Agreement in accordance with policies established by the Company.

2. The following compensation will be paid to Employee during the Term of this Agreement:

Base Salary . During the Term of this Agreement, the Company agrees to pay Employee a base salary as follows:

April 16, 2006 through April 15, 2007 — the rate of Four Hundred Thousand dollars ($400,000.00) per year (“Base Salary — Year 1”), payable in accordance with the Company’s normal payroll practices in effect.

April 16, 2007 through April 15, 2008 — the rate of Four Hundred Twenty Five

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Thousand dollars ($425,000.00) per year (“Base Salary — Year 2”), payable in accordance with the Company’s normal payroll practices in effect.

In the event that this Agreement is extended for a third year at the Company’s option (April 16, 2008 through April 15, 2009) in accordance with Section 1 above, Employee’s compensation shall be at the rate of Four Hundred Fifty Thousand dollars ($450,000.00) per year (“Base Salary — Option Year”), payable in accordance with the Company’s normal payroll practices in effect.

Nothing in this Agreement shall limit the Company’s right to modify its payroll practices, as it deems necessary.

During the Term, Employee shall be entitled to receive performance bonuses at the full discretion of the CEO of the Company and the approval of the Board of the Company. Employee must be employed with the Company through the last day of the bonus year to be eligible to receive a discretionary performance bonus for that year, and any such bonus will be paid within the “short-term deferral” period provided under Treasury Regulation Section 1.409A-1(a)(4) (generally within two and one-half months after the end of the fiscal year for which the bonus is paid).

3. As an employee of the Company, Employee will continue to be eligible to participate in all benefit plans to the same extent as other salaried employees subject to the terms of such plans.

4. Employee shall be entitled to take paid time off without a reduction in salary, subject to (i) the approval of Employee’s supervisor, and (ii) the demands and requirements of Employee’s duties and responsibilities under this Agreement. There are no paid vacation days. Finally, Employee will be eligible to be reimbursed for any business expenses in accordance with the Company’s current Travel and Entertainment policy.

5. Lions Gate shall request that the Compensation Committee of Lions Gate (“CCLG”) authorize and grant Employee 25,000 common shares (“Grants”) of Lions Gate Entertainment Corp. in accordance with the terms and conditions of the existing and/or future Employee Stock Plan (collectively, the “Plan”). Employee acknowledges that this Grant of stock is subject to (i) the approval of the CCLG; and (ii) Lions Gate Entertainment Corp’s Shareholders (“Shareholders”) approving an increase to the number of options and shares available under the Plan. The next scheduled meeting of the Shareholders shall be in September, 2006. The award date (“Award Date”) shall be the date of the board meeting when the Grant is approved. The Grant shall vest as follows:

1/3 on the 1 ^st anniversary of the Award Date;
2/3 on the 2 ^nd anniversary of the Award Date;
3/3 on the 3 ^rd anniversary of the Award Date.

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If the Grants described herein are not approved by the CCLG or Shareholders do not approve additional options and shares under the plan, Employee shall receive the cash equivalent (“Cash Equivalent”). The Cash Equivalent shall be the value of the shares on the date such shares (or a portion thereof) would have vested, and shall be paid on such date.

In the event of Employee’s death, the shares granted, if any, in this Section 5 shall be deemed fully vested.

In the event the Company does not elect to extend this Agreement to April 15, 2009 (Option Year) per paragraph 2 of Section 1, the Grants should be deemed fully vested at the end of Year 2.

6. Employee agrees that the Company Employee Handbook outlines other policies, which will apply to Employee’s employment, and Employee acknowledges receipt of such handbook. Please note, however, that the Company retains the right to revise, modify or delete any policy or benefit plan it deems appropriate.

7. This Agreement shall terminate upon the happening of any one or more of the following events:

(a) The mutual written agreement between the Company and Employee; or

(b) The death of Employee; or

(c) Employee’s having become so physically or mentally disabled as to be incapable, even with a reasonable accommodation, of satisfactorily performing Employee’s duties hereunder for a period of ninety (90) days or more, provided that Employee has not cured such disability within ten (10) days of written notice; or

(d) The determination on the part of the Company that “cause” exists for termination of this Agreement, with “cause” being defined as any of the following: 1) Employee’s conviction of a felony or plea of nolo contendere to a felony, except in connection with a traffic violation; 2) Employee’s commission, by act or omission, of any material act of dishonesty in the performance of Employee’s duties hereunder; 3) material breach of this Agreement by Employee; or 4) any act of misconduct by Employee having a substantial adverse effect on the business or reputation of the Company.

(e) Employee is terminated “without cause.” Termination “without cause” shall be defined as Employee being terminated by the Company for any reason other than as set forth in Sections 7(a)-(d) above. In the event of a termination “without cause,” Employee shall be entitled to receive (i) a severance payment equal to 50% of the amount of the Base Salary (or, if such termination occurs during the Option Year, 50% of the amount of the Base Salary — Option Year) which Employee would have been entitled to receive for the period commencing on the date of such termination and ending on the last day of the Term (or, if such termination occurs

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during an Option Year, the last day of the Option Year) had Employee continued to be employed with the Company through such date, but in no event less than six (6) months’ Base Salary at the monthly rate in effect on the date of such termination, such payment to be made, subject to Section 13, in cash in a lump sum as soon as practicable after (and in all events not more than two and one-half (2 ¹ / 2 ) months after) the date of Employee’s Separation from Service with the Company, and (ii) payment by the Company of the cost of Employee’s COBRA coverage (for Employee and Employee’s eligible dependents at the levels in effect on the termination date) until the earlier of either six (6) months following the date of the termination of Employee’s employment with the Company or the date Employee secures new employment and is eligible for health care benefits. The Company’s payment of the amounts described above in this Section 7(e) shall relieve the Company of any and all obligations to Employee. As used herein, a “Separation from Service” occurs when Employee dies, retires, or otherwise has a termination of employment with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.

In the event that this Agreement is terminated pursuant to any of Sections 7(a)-(d) above, neither the Company nor Employee shall have any remaining duties or obligations hereunder, except that (i) the Company shall pay to Employee only such compensation as is earned under Section 2 as of the date of Employee’s termination of employment and (ii) Employee shall continue to be bound by Sections 9, 11, 12 and 13. For the sake of clarity, following the termination of this Agreement for any reason, Sections 9, 11, 12 and 13 shall survive and be binding upon Employee following his termination of employment with the Company.

8. Employee’s services shall be exclusive to Lions Gate during the Term. Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the motion picture industry and as may be reasonably requested by Lions Gate. Employee hereby agrees to comply with all reasonable requirements, directions and requests, and with all reasonable rules and regulations made by Lions Gate in connection with the regular conduct of its business; to render services during Employee’s employment hereunder whenever and wherever and as often as Lions Gate may reasonably require in a competent, conscientious and professional manner, and as instructed by Lions Gate in all matters, including those involving artistic taste and judgment, but there shall be no obligation on Lions Gate to cause or allow Employee to render any services, or to include all or any of Employee’s work or services in any motion picture or other property or production.

9. Employee agrees that Lions Gate shall own all rights of every kind and character throughout the universe, in perpetuity to any material and/or idea suggested or submitted by Employee or suggested or submitted to Employee by a third party that occurs during the Term or any other period of employment with the Company, its parent, affiliates, or subsidiaries that are within the scope of Employee’s employment and responsibilities hereunder. Employee agrees that during the Term and any other period of employment with the Company, its parent, affiliates, or subsidiaries, Lions Gate shall own all other results and proceeds of Employee’s services that are related to Employee’s employment and responsibilities. Employee shall

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promptly and fully disclose all intellectual property generated by the Employee during the Term and any other period of employment with the Company, its parent, affiliates, or subsidiaries in connection with Employee’s employment hereunder. All copyrightable works that Employee creates in connection with Employee’s obligations under this Agreement and any other period of employment with the Company, its parent, affiliates, or subsidiaries shall be considered “work made for hire” and therefore the property of the Company. To the extent any work so produced or other intellectual property so generated by Employee is not deemed to be a “work made for hire,” Employee hereby assigns and agrees to assign to the Company(or as otherwise directed by the Company) Employee’s full right, title and interest in and to all such works and other intellectual property. Employee agrees to execute any and all applications for domestic and foreign copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the intellectual property to the Company and to permit the Company to enforce any copyrights or other proprietary rights to the intellectual property. Employee will not charge the Company for time spent in complying with these obligations. This Section 9 shall apply only to that intellectual property which related at the time of conception to the Company’s then current or anticipated business or resulted from work performed by Employee for the Company. Employee hereby acknowledges receipt of written notice from the Company pursuant to California Labor Code Section 2872 that this Agreement (to the extent it requires an assignment or offer to assign rights to any invention of Executive) does not apply fully to an invention which qualifies fully under California Labor Code Section 2870.

10. Employee shall not assign any of Employee’s rights or delegate any of Employee’s duties under this Agreement.

11. The parties acknowledge and agree that during the Term of this Agreement and in the course of the discharge of Employee’s duties hereunder and at any other period of employment with the Company, its parent, affiliates, or subsidiaries, Employee shall have and has had access to information concerning the operation of Lions Gate and its affiliated entities, including without limitation, financial, personnel, sales, planning and other information that is owned by Lions Gate and regularly used in the operation of Lions Gate’s business and (to the extent that such confidential information is not subsequently disclosed) that this information constitutes Lions Gate’s trade secrets. Employee agrees that Employee shall not disclose any such trade secrets, directly or indirectly, to any other person or use them in any way, either during the Term of this Agreement or at any other time thereafter, except as is required in the course of Employee’s employment for Lions Gate. Employee shall not use any such trade secrets in connection with any other employment and/or business opportunities following the Term. In addition, Employee hereby expressly agrees that Employee will not disclose any confidential matters of Lions Gate that are not trade secrets prior to, during or after Employee’s employment including the specifics of this Agreement. Employee shall not use any such confidential information in connection with any other employment and/or business opportunities following the Term. In addition, in order to protect the Confidential Information, Employee agrees that during the Term and for a period of two (2) years thereafter, Employee will not, directly or indirectly, induce or entice any other executive of the Company to leave such employment or

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cause anyone else to leave such employment.

12. Any dispute, controversy or claim arising out of or in respect to this Agreement (or its validity, interpretation or enforcement), the employment relationship or the subject matter hereof shall at the request of either party be submitted to and settled by binding arbitration conducted before a single arbitrator in Los Angeles in accordance with the Federal Arbitration Act, to the extent that such rules do not conflict with any provisions of this Agreement. Said arbitration shall be under the jurisdiction of Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in Los Angeles, California. All such actions must be instituted within one year after the controversy or claim arose or forever be waived. Failure to institute an arbitration proceeding within such period shall constitute an absolute bar to the institution of any proceedings respecting such controversy or claim, and a waiver thereof. The arbitrator shall have the authority to award damages and remedies in accordance with applicable law. Any award, order of judgment pursuant to such arbitration shall be deemed final and binding and may be entered and enforced in any state or federal court of competent jurisdiction. Each party agrees to submit to the jurisdiction of any such court for purposes of the enforcement of any such award, order of judgment. Company shall pay for the administrative costs of such hearing and proceeding.

13. It is intended that any amounts payable under this Agreement and any exercise of authority or discretion hereunder by the Company or Employee shall comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) (“Section 409A”) so as not to subject Employee to payment of any interest or additional tax imposed under Section 409A. To the extent that any amount payable under this Agreement would trigger the additional tax imposed by Section 409A, this Agreement shall be construed and interpreted in a manner to avoid such additional tax yet preserve (to the nearest extent reasonably possible) the intended benefit payable to Employee.

Notwithstanding any other provision herein, if Employee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Employee’s Separation from Service, Employee shall not be entitled to any payment or benefit pursuant to Section 7(e) above until the earlier of (i) the date which is six (6) months after his or her Separation from Service for any reason other than death, or (ii) the date of Employee’s death. Any amounts otherwise payable to Employee upon or in the six (6) month period following Employee’s Separation from Service that are not so paid by reason of this paragraph shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after Employee ’s Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of Employee’s death). The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.

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to any such provision shall be paid to Employee on or before the last day of Employee’s taxable year following the taxable year in which the related expense was incurred. The benefits and reimbursements pursuant to such provisions are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Employee receives in one taxable year shall not affect the amount of such benefits or reimbursements that Employee receives in any other taxable year.

14. This Agreement expresses the binding and entire agreement between Employee and the Company and shall replace and supersede all prior arrangements and representations, either oral or written, as to the subject matter hereof (including, without limitation, the Prior Employment Agreement, except as expressly provided herein). All modifications or amendments to this Agreement must be in writing, signed by both parties.

Very truly yours,


LIONS GATE FILMS, INC.

By:		/s/ Wayne Levin Wayne Levin
		Executive Vice President and General Counsel

AGREED AND ACCEPTED
This day of , 2008


By:		/s/ James Keegan James Keegan

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Exhibit 10.61

December 15, 2008

Mr. Wayne Levin


		Re:		Amended and Restated Employment Agreement

Dear Wayne:

On behalf of Lions Gate Films Inc. (the “Company”), this letter is to confirm the terms of your employment by the Company. We refer to you herein as “Employee.” The employment agreement entered into as of April 1, 2006, between Employee and the Company (the “Prior Employment Agreement”), is hereby amended and restated in its entirety. The terms of Employee’s employment from the Effective Date (as defined below) are as follows:

1. The term of this agreement (this “Agreement”) will begin April 1, 2006 (the “Effective Date”) and end March 31, 2009, subject to early termination as provided in this Agreement (the “Term”). During the Term of this Agreement, Employee will serve as General Counsel and Executive Vice President, Corporate Operations. Employee shall report to the CEO in his capacity as General Counsel and to the COO, or person performing substantially such role in his capacity as Executive Vice President, Corporate Operations. For the purpose hereof, Employee agrees that Steve Beeks performs such function. Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the motion picture industry and as may be reasonably requested by the Company.

The Company may, at its sole discretion, extend the Term of this Agreement for an additional year, commencing April 1, 2009 and ending March 31, 2010 (the “Option Year”) by giving notice to Employee of its election to extend this Agreement at least one hundred eighty (180) days before that date.

2. The following compensation will be paid to Employee during the Term of this Agreement:

(a) Base Salary . During the Term of this Agreement, the Company agrees to pay Employee an annual Base Salary as follows:

For first year of the Term, the rate of $400,000 per year, payable in accordance with the Company’s normal payroll practices in effect.

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For the remainder of the Term, the rate of $500,000 per year, payable in accordance with the Company’s normal payroll practices in effect.

During the Option Year, the rate of $600,000 per year, payable in accordance with the Company’s normal payroll practices in effect.

Nothing in this Agreement shall limit the Company’s right to modify its payroll practices, as it deems necessary.

(b) Bonuses :

(i) An annual bonus at the full discretion of the CEO;

(ii) An annual bonus of 25% of Base Salary based upon Established Goals. The Established Goals shall be set forth in writing at the beginning of each fiscal, and shall be discussed in good faith between the Company and Employee; and

(iii) An annual bonus of 25% of Base Salary based upon the EBITDA of the Company on a most favored nation (“MFN”) basis with any person receiving an EBITDA based bonus. For the sake of clarity, the MFN basis applies to the definition of EBITDA, the EBITDA target, and the percentages of Base Salary payable at various levels of the EBITDA target.

(iv) Employee must be employed with the Company through the last day of the bonus year to be eligible to receive an annual bonus pursuant to the foregoing provisions of this Section 2(b) for that year, and any such bonus will be paid within the “short-term deferral” period provided under Treasury Regulation Section 1.409A-1(a)(4) (generally within two and one-half months after the end of the fiscal year for which the bonus is paid).

(v) Change of Control Bonus: For the purposes of this Agreement, “Change of Control” shall have the same meaning as set forth in the employment agreement of Michael Burns, dated as of September 1, 2003. The Company shall pay Employee a Bonus of $1,000,000 upon a Change of Control (the “Change of Control Bonus”). Notwithstanding anything to the contrary, the Change of Control Bonus shall vest 100% if discussions relating and leading to a Change of Control commence during the Term hereof, whether or not the Change of Control is actually consummated after the Term or the termination hereof. However, the Change of Control Bonus shall become unvested and not be payable if the principal agreement giving rise to the Change of Control is not signed within one (1) year following Employee’s termination of employment. Subject to the foregoing provisions, the Change of Control Bonus shall be paid in cash in a lump sum within ten (10) days following the closing of the Change of Control that triggers such bonus payment.

(vi) Two Past Services Bonuses: The first in the amount of $100,000,

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which shall be paid April 3, 2006; and the Second in the amount of $125,000 which shall be paid April 3, 2007. These Bonuses shall not be applicable against any other bonus payable pursuant to this Agreement and shall not be counted as any portion of Employee’s bonus for the fiscal year 2006.

3. As an employee of the Company, Employee will continue to be eligible to participate in all benefit plans, including Senior Management Plans, to the same extent as other employees, subject to the terms of such plans.

5. The Company shall request that the Compensation Committee of Lions Gate (“CCLG”) authorize and grant Employee 100,000 common share units (“Grants”) of Lions Gate Entertainment Corp. in accordance with the terms and conditions of the existing and/or future Employee Stock Plan (“Plan”). Employee acknowledges that this Grant of stock is subject to the approval of the CCLG. The award date (“Award Date”) shall be the date of the board meeting when the Grant is approved. The Grant shall vest as follows:

50% on March 31, 2008 and 50% on March 31, 2009

When the Company obtains an additional allotment of shares under the Plan, the Company shall grant Employee 25,000 common share units (the “Further Grants”) of Lions Gate Entertainment Corp. in accordance with the terms and conditions of the Plan. The Further Grants shall vest as follows:

50% on March 31, 2008 and 50% on March 31, 2009

If the Company does not obtain an additional allotment of shares, then it shall pay Employee in cash the value of such Further Grants on the date such Further Grants were to have vested.

If any employee’s stock options or shares that are issued under the Plan accelerate in vesting schedule as a result of a Change of Control, Employee’s previously granted stock options, Further Grants, and shares issued hereunder shall likewise accelerate in vesting schedule.

For the sake of clarity, all options granted under Employee’s prior employment agreement (other than the Prior Agreement, as defined herein) shall continue to vest in accordance with the terms of such prior agreement.

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Employee represents and warrants that, during the Term hereof, Employee shall hold at least 5000 shares of common shares of the Company.

7. This Agreement shall terminate upon the happening of any one or more of the following events:

(a) The mutual written agreement between the Company and Employee; or

(b) The death of Employee. However, in the event of the death of Employee, all granted shares and stock options shall immediately vest; or

(c) Employee’s having become so physically or mentally disabled as to be incapable, even with a reasonable accommodation, of satisfactorily performing his duties hereunder for a period of ninety (90) days or more, provided that Employee has not cured such disability within ten (10) days of written notice; or

(d) The determination on the part of the Company that “Cause” exists for termination of this Agreement, with “Cause” being defined as any of the following: 1) Employee’s conviction of a felony or plea of nolo contendere to a felony, except in connection with a traffic violation; 2) Employee’s commission, by act or omission, of any material act of dishonesty in the performance of Employee’s duties hereunder; 3) material breach of this Agreement by Employee causing material harm to the Company; or 4) any act of misconduct by Employee having a substantial adverse effect on the business or reputation of the Company.

(e) Employee is terminated Without Cause. Termination “Without Cause” shall be defined as Employee being terminated by the Company for any reason other than as set forth in Sections 7(a)-(d) above. In the event of a termination Without Cause, Employee shall be entitled to receive (i) 50% of the amount of the Base Salary which Employee would have been entitled to receive for the period commencing on the date of such termination and ending on the last day of the Term (or, if such termination occurs during the Option Year, the last day of the Option Year) had Employee continued to be employed with the Company through such date, such payment to be made, subject to Section 13, in cash in a lump sum as soon as practicable after (and in all events not more than two and one-half (2 ¹ / 2 ) months after) the date of Employee’s Separation from Service with the Company, and (ii) all bonuses pursuant to Section 2 (other than the Change of Control Bonus, which shall vest and be payable as set forth in Section 2(b)(v)), shall be paid on a prorated basis for the year of termination of employment in proportion to the amount of such year worked by Employee (such bonus(es) to be paid at the times provided in Section 2(b)(iv)) and shall not become payable in years subsequent to the year of termination of employment. The Company’s payment of the amounts described above in this Section 7(e) shall relieve the Company of any and all obligations to Employee. As used herein, a “Separation from Service” occurs when Employee dies, retires, or otherwise has a termination of employment with

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the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.

(f) The forgoing notwithstanding, if Employee’s employment with the Company is not terminated contemporaneous with a Change of Control, but is terminated subsequent thereto Without Cause or by Employee for “Good Reason” (as defined below), then Employee shall be entitled to receive (in addition to any rights to accelerated vesting of equity awards under Section 5 hereof) (i) 100% of the amount of the Base Salary which Employee would have been entitled to receive for the period commencing on the date of such termination and ending on the last day of the Term (or, if such termination occurs during the Option Year, the last day of the Option Year) had Employee continued to be employed with the Company through such date, such payment to be made, subject to Section 13, in cash in a lump sum as soon as practicable after (and in all events not more than two and one-half (2 ¹ / 2 ) months after) the date of Employee’s Separation from Service with the Company, and (ii) all bonuses pursuant to Section 2 shall be paid at the times provided in Section 2(b). The Company’s payment of the amounts described above in this Section 7(f) shall relieve the Company of any and all obligations to Employee. For purposes hereof, “Good Reason” shall mean any material diminution by the Company in Employee’s responsibilities as measured against Employee’s responsibilities prior to the Change of Control; provided, however, that any such condition shall not constitute “Good Reason” unless both (x) Employee provides written notice to the Company of the condition claimed to constitute Good Reason within ninety (90) days of the initial existence of such condition, and (y) the Company fails to remedy such condition within thirty (30) days of receiving such written notice thereof; and provided, further, that in all events the termination of Employee’s employment with the Company shall not be treated as a termination for “Good Reason” unless such termination occurs not more than one (1) year following the initial existence of the condition claimed to constitute “Good Reason.” For these purposes, if the Company is purchased by a larger entity, it shall not be considered a material diminution in responsibility if Employee is made either (i) General Counsel or (ii) EVP, Operations of that larger entity. However, it shall be considered a material diminution in responsibility if Employee is required to report to another person performing a legal role in such larger entity, General Counsel or otherwise, unless Employee consents.

(g) In the event that this Agreement is terminated pursuant to any of Sections 7(a)-(d) above, neither the Company nor Employee shall have any remaining duties or obligations hereunder, except that the Company shall pay to Employee only such compensation as is earned under Section 2 as of the date of Employee’s termination of employment with the Company.

8. Employee’s services shall be exclusive to the Company during the Term. Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the motion picture industry and as may be reasonably requested by the Company. Employee hereby agrees to comply with all reasonable requirements, directions and requests, and with all reasonable rules and regulations made by the Company in connection with the regular conduct of its business; to render services during Employee’s employment hereunder whenever and wherever and as often as the Company may reasonably require in a competent, conscientious and professional manner, and as instructed by the Company in all matters, including those

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involving artistic taste and judgment, but there shall be no obligation on the Company to cause or allow Employee to render any services, or to include all or any of Employee’s work or services in any motion picture or other property or production.

9. Employee agrees that the Company shall own all rights of every kind and character throughout the universe, in perpetuity to any material and/or idea suggested or submitted by Employee or suggested or submitted to Employee by a third party that occurs during the Term or any other period of employment with the Company, its parent, affiliates, or subsidiaries that are within the scope of Employee’s employment and responsibilities hereunder. Employee agrees that during the Term and any other period of employment with the Company, its parent, affiliates, or subsidiaries, the Company shall own all other results and proceeds of Employee’s services that are related to Employee’s employment and responsibilities. Employee shall promptly and fully disclose all intellectual property generated by the Employee during the Term and any other period of employment with the Company, its parent, affiliates, or subsidiaries in connection with his employment hereunder. All copyrightable works that Employee creates in connection with his obligations under this Agreement and any other period of employment with the Company, its parent, affiliates, or subsidiaries shall be considered “work made for hire” and therefore the property of the Company. To the extent any work so produced or other intellectual property so generated by Employee is not deemed to be a “work made for hire,” Employee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Employee’s full right, title and interest in and to all such works and other intellectual property. Employee agrees to execute any and all applications for domestic and foreign copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the intellectual property to the Company and to permit the Company to enforce any copyrights or other proprietary rights to the intellectual property. Employee will not charge the Company for time spent in complying with these obligations. This Section 9 shall apply only to that intellectual property which related at the time of conception to the Company’s then current or anticipated business or resulted from work performed by Employee for the Company. Employee hereby acknowledges receipt of written notice from the Company pursuant to California Labor Code Section 2872 that this Agreement (to the extent it requires an assignment or offer to assign rights to any invention of Executive) does not apply fully to an invention which qualifies fully under California Labor Code Section 2870.

10. Employee shall not assign any of his rights or delegate any of his duties under this Agreement.

11. The parties acknowledge and agree that during the Term of this Agreement and in the course of the discharge of his duties hereunder and at any other period of employment with the Company, its parent, affiliates, or subsidiaries, Employee shall have and has had access to information concerning the operation of the Company and its affiliated entities, including without limitation, financial, personnel, sales, planning and other information that is owned by the Company and regularly used in the operation of the Company’s business and (to the extent that such confidential information is not subsequently disclosed) that this information constitutes the Company’s trade secrets. Employee agrees that he shall not disclose any such trade secrets, directly or indirectly, to any other person or use them in any way, either during the Term of this

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Agreement or at any other time thereafter, except as is required in the course of his employment for the Company. Employee shall not use any such trade secrets in connection with any other employment and/or business opportunities following the Term. In addition, Employee hereby expressly agrees that Employee will not disclose any confidential matters of the Company that are not trade secrets prior to, during or after Employee’s employment including the specifics of this Agreement. Employee shall not use any such confidential information in connection with any other employment and/or business opportunities following the Term. In addition, in order to protect the Confidential Information, Employee agrees that during the Term and for a period of two (2) years thereafter, Employee will not, directly or indirectly, induce or entice any other executive of the Company to leave such employment or cause anyone else to leave such employment.

12. Any dispute, controversy or claim arising out of or in respect to this Agreement (or its validity, interpretation or enforcement), the employment relationship or the subject matter hereof shall at the request of either party be submitted to and settled by binding arbitration conducted before a single arbitrator in Los Angeles in accordance with the Federal Arbitration Act, to the extent that such rules do not conflict with any provisions of this Agreement. Said arbitration shall be under the jurisdiction of Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in Los Angeles, California. All such actions must be instituted within one year after the controversy or claim arose or forever be waived. Failure to institute an arbitration proceeding within such period shall constitute an absolute bar to the institution of any proceedings respecting such controversy or claim, and a waiver thereof. The arbitrator shall have the authority to award damages and remedies in accordance with applicable law. Any award, order of judgment pursuant to such arbitration shall be deemed final and binding and may be entered and enforced in any state or federal court of competent jurisdiction. Each party agrees to submit to the jurisdiction of any such court for purposes of the enforcement of any such award, order of judgment. The Company shall pay for the administrative costs of such hearing and proceeding.

Notwithstanding any other provision herein, if Employee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Employee’s Separation from Service, Employee shall not be entitled to any payment or benefit pursuant to Section 7(e) or 7(f) above until the earlier of (i) the date which is six (6) months after his or her Separation from Service for any reason other than death, or (ii) the date of Employee’s death. Any amounts otherwise payable to Employee upon or in the six (6) month period following Employee’s Separation from Service that are not so paid by reason of this paragraph shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after Employee ’s Separation from Service (or, if earlier, as soon as

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practicable, and in all events within thirty (30) days, after the date of Employee’s death). The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.

Any reimbursements made to Employee hereunder will be made in accordance with the Company’s reimbursement policies, practices and procedures in effect from time to time. To the extent that any reimbursements pursuant to Section 4 of this Agreement are taxable to Employee, any reimbursement payment due to Employee pursuant to such provision shall be paid to Employee on or before the last day of Employee’s taxable year following the taxable year in which the related expense was incurred. The benefits and reimbursements pursuant to such provision are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Employee receives in one taxable year shall not affect the amount of such benefits or reimbursements that Employee receives in any other taxable year

Very truly yours,


LIONS GATE FILMS, INC.

By:		/s/ Steve Beeks Steve Beeks President and Co-Chief Operating Officer


AGREED AND ACCEPTED

By:		/s/ Wayne Levin Wayne Levin

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Exhibit 10.62

INDEMNITY AGREEMENT

This INDEMNITY AGREEMENT is made as of the day of February 2009, by and between Lions Gate Entertainment Corp., a company incorporated under the Business Corporations Act (British Columbia) (hereinafter referred to as the “ Company ”), and (hereinafter referred to as the “ Nominee ”).

WHEREAS , the Nominee has been requested to consent to act or to continue to act as a director, alternate director or officer of the Company and, from time to time, may be appointed a director, alternate director or officer of one or more Associated Corporations (hereinafter defined); and

WHEREAS , the Nominee is willing to act or to continue to act on the condition that the Company enter into this Indemnity Agreement.

NOW THEREFORE , in consideration of the Nominee consenting to act as a director, alternate director or officer of the Company and/or its Associated Corporations and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the parties, the Company agrees with the Nominee as follows:

1. DEFINITIONS

For the purposes of this Indemnity Agreement: 1.1 “ affiliate ” has the meaning given in the Business Corporations Act (British Columbia);

1.2 “ Associated Corporation ” means a corporation or entity that:

(a) is or was an affiliate of the Company;

(b) is a corporation, other than the Company, for which the Nominee is or was a director, alternate director or officer at the request of the Company; or

(c) is a partnership, trust, joint venture or other unincorporated entity for which the Nominee holds or held a position equivalent to that of a director, alternate director or officer, at the request of the Company; and

1.3 “ expenses ” includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a Claim.

2. INDEMNITY

2.1 General Scope: The Company shall indemnify the Nominee and the Nominee’s heirs, executors, administrators and personal representatives (collectively the “ Indemnitees ” and, individually, an “ Indemnitee ”) for all liabilities or obligations imposed upon or incurred by the Indemnitees at law, in equity or by, pursuant to or under any statute or regulation and all expenses (“ Liability ”) in relation to any claim, action, proceeding, investigation, or order whether civil, criminal or administrative and whether made or commenced by the Company, by an Associated Corporation or by any other person (collectively, or individually, a “ Claim ”) by reason of:

(a) the Nominee being or having been a director, alternate director or officer of, or

holding or having held a position equivalent to that of a director, alternate director or officer of, the Company or any Associated Corporation, or

(b) any act or omission, whether or not negligent, of the Nominee acting as a director, alternate director or officer, or as a person in an equivalent position, of the Company or any Associated Corporation,

including without limitation, legal fees and disbursements and all other costs of investigation and defence incurred by the Indemnitees or any of them in relation to a Claim, whether or not any action or proceeding is commenced, and all amounts paid or payable by the Indemnitees or any of them, to settle a Claim or to satisfy a judgment, including without limitation the payment of interest and costs, or otherwise to discharge a Liability imposed or incurred.

2.2 Absolute Liability: Without limiting the generality of paragraph 2.1, the Company shall indemnify the Indemnitees against any Liability in relation to a Claim which is statutorily imposed on the Nominee.

2.3 Negligence: Without limiting the generality of paragraph 2.1, the Company shall indemnify the Indemnitees against any Liability in relation to a Claim arising from negligent conduct of the Nominee.

2.4 Actual Payment: The Company shall pay all amounts due to an Indemnitee under this Indemnity Agreement forthwith upon demand by the Indemnitee.

3. INDEMNITY RESTRICTED

Despite any other provision of this Indemnity Agreement, the Company is not obliged under this Indemnity Agreement to make any payment that is prohibited by applicable law, including, as at the date of this Indemnity Agreement, Section 163 of the Business Corporations Act (British Columbia) if that provision is applicable, or by court order in force at the date the payment must be made.

4. ADVANCE EXPENSES

Unless prohibited by applicable law or court order, the Company shall pay, as they are incurred, in advance of the final disposition of a Claim, the expenses actually and reasonably incurred by an Indemnitee in respect of the Claim provided that the Company shall not make such payments unless the Company first receives from the Indemnitee a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by applicable law, the Indemnitee will repay the amounts advanced.

5. TAXABLE BENEFITS

Any indemnity payment made pursuant to this Indemnity Agreement shall be grossed up by the amount of any tax payable by the Indemnitee pursuant to the Income Tax Act (Canada) in respect of such payment.

6. ENFORCEMENT COSTS

6.1 Application to Court: If any payment by the Company under this Indemnity Agreement would be prohibited under paragraph 3 unless approved by a court, or if there shall be a disagreement between the Company and any Indemnitee as to whether or not an indemnification under this Indemnity Agreement would be prohibited under paragraph 3 unless approved by the court, the Company, at its own

expense and in good faith, will promptly take proceedings to obtain that approval or such other appropriate determination. The Company shall indemnify the Indemnitees for the amount of all costs incurred by any or all of them in obtaining any court approval contemplated by this paragraph 6.1, including without limitation all legal fees and disbursements.

6.2 Independent Counsel: The Indemnitees, or any of them, may each retain their own independent legal counsel for the purpose set out in paragraph 6.1 or for any other purpose in relation to a Claim and the cost of such representation shall be considered a “Liability” to which this Indemnity Agreement applies.

6.3 No Presumption of Wrong Doing: The determination of any Claim, by adjudication, settlement, or otherwise, shall not, of itself, create any presumption for the purposes of this Indemnity Agreement that the Nominee did not act honestly and in good faith with a view to the best interests of the Company or an Associated Corporation, or, in the case of a criminal or administrative action or proceeding, that the Nominee did not have reasonable grounds for believing that his conduct was lawful, unless a judgment or order of the Court specifically finds otherwise.

7. NOMINEE CEASING TO ACT

The Nominee may resign at any time as a director, alternate director and/or officer, or from an equivalent position, of the Company or any Associated Corporation. The obligations of the Company hereunder continue after and are not affected in any way by the Nominee ceasing to be a director, alternate director and/or officer, or to hold an equivalent position, of the Company or any Associated Corporation whether by resignation, removal, death, incapacity, disqualification under applicable law or otherwise.

8. RE-ELECTION

The obligations of the Company under this Indemnity Agreement continue after and are not affected in any way by the re-election or re-appointment from time to time of the Nominee as a director or officer, or to an equivalent position, of the Company or any of its Associated Corporations.

9. CONTINUING INDEMNITY

9.1 Other Compensation: The obligations of the Company under this Indemnity Agreement are not diminished or in any way affected by:

(a) Financial Interest: the Nominee holding from time to time any direct or indirect financial interest in the Company, in an Associated Corporation or in a corporation otherwise related to the Company;

(b) Salary/Compensation: payment by the Company, by an Associated Corporation, or by any corporation otherwise related to the Company, to the Nominee of director’s fees or any salary, wages or other compensation;

(c) Interested Contracts: payment by the Company, by an Associated Corporation, or by any corporation otherwise related to the Company, to the Nominee or to any firm of which the Nominee is a partner, associate or employee, of any fees for services rendered;

(d) D & O Insurance: any directors’ or officers’ liability insurance placed by or for the benefit of the Nominee by the Nominee, the Company, an Associated Corporation or any entity related to any of them; or

(e) Other Indemnities: payment to the Nominee by any shareholder of the Company, an Associated Corporation or any corporation otherwise related to the Company, or by any other person pursuant to any other contract of indemnity.

9.2 Non Compliance with Constating Documents: The obligations of the Company under this Indemnity Agreement are not diminished, or in any way affected by the Nominee’s failure to comply with the provisions of the Business Corporations Act (British Columbia) or of the memorandum, articles or nature of articles of the Company.

9.3 Non Waiver: No waiver by the Nominee of any default or breach of any of the terms, covenants, conditions, or obligations of this Indemnity Agreement shall constitute a waiver by the Nominee of any prior, concurrent, or subsequent default or breach of the same, or any other term, covenant, condition, or obligation of the Company.

10. REPORTING

10.1 Material Developments: The Company shall report promptly and regularly to the Nominee any material adverse change in the financial condition, business or property of the Company or any entity related to it and any event or circumstance known to the Company that may result, directly or indirectly, in any liability or obligation being imposed upon any Indemnitee.

10.2 Nominee Cooperation: The Nominee agrees to give notice to the Company within two business days of being served with any statement of claim, writ, notice of motion, indictment, or other documents commencing or continuing any Claim against the Nominee. The Nominee agrees to give the Company such information and cooperation as the Company may reasonably require from time to time in respect of all matters contemplated by this Indemnity Agreement.

10.3 Company Cooperation: The Company agrees to notify the Nominee in writing within two business days of being served with any statement of claim, writ, notice of motion, indictment, or other document commencing or continuing any Claim against the Nominee. The Company agrees to give the Nominee such information and cooperation as the Nominee may reasonably require from time to time in respect of all matters under this Indemnity Agreement.

11. LAW AND JURISDICTION

This Indemnity Agreement is governed by British Columbia law. The Company and the Nominee agree irrevocably and unconditionally to the jurisdiction of the courts of British Columbia in respect of any action or proceeding commenced by an Indemnitee or the Company in respect of this Indemnity Agreement.

12. ENUREMENT

This Indemnity Agreement enures to the benefit of the Nominee and the Nominee’s heirs, executors, administrators and personal representatives. This Indemnity Agreement is binding upon the Company and its successors and assigns.

IN WITNESS WHEREOF this Indemnity Agreement has been executed by the Company and the Nominee on the date first above written.


Lions Gate Entertainment Corp.

By:

Name:
Title:
(Authorized Signatory)


Nominee

Signature Page

Exhibit 31.1

CERTIFICATION

I, Jon Feltheimer certify that:

1. I have reviewed this quarterly report on Form 10-Q of Lions Gate Entertainment Corp. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

/s/ Jon Feltheimer

Jon Feltheimer

Chief Executive Officer

Date: February 9, 2009

Exhibit 31.2

CERTIFICATION

I, James Keegan certify that:

1. I have reviewed this quarterly report on Form 10-Q of Lions Gate Entertainment Corp. (the “Company”);

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

/s/ James Keegan

James Keegan

Chief Financial Officer

Date: February 9, 2009

Exhibit 32.1

WRITTEN STATEMENT
PURSUANT TO
18 U.S.C. SECTION 1350

The undersigned officers of Lions Gate Entertainment Corp. (the “Company”), pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that, to their knowledge:

(i) the Form 10-Q of the Company (the “Report”) for the quarterly period ended December 31, 2008, fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for the periods presented in this report.

/s/ Jon Feltheimer

Jon Feltheimer

Chief Executive Officer

Date: February 9, 2009

/s/ James Keegan

James Keegan

Chief Financial Officer

Date: February 9, 2009