Landmark Agreement to More than Double the Number of Commercial IMAX(R) Theatres in China

Commercial Exhibitors Continue Embracing IMAX(R) MPX(TM) Theatre System to Differentiate Multiplexes and Drive Box Office Revenues

TORONTO, Jan. 5 /PRNewswire-FirstCall/ - IMAX Corporation (Nasdaq: IMAX; TSX: IMX) and Lark International Multimedia (LMM) today announced an agreement to install six IMAX(R) MPX(TM) theatre systems at multiplexes in The People's Republic of China in the next four years. LMM owns two subsidiaries, Studio City Cinema Holdings Limited, operator of China's top ranking multiplex cinemas and UA Cinema Circuit Limited, operator of 55 screens and the number one grossing theatre in Hong Kong. Under the agreement, new and retrofitted IMAX(R) theatres are scheduled to open in prominent multiplex locations in major urban centers through 2008, with specific locations to be announced.

The agreement marks a significant milestone in the global rollout of IMAX's commercial growth strategy, establishing a series of multiplex-based IMAX theatres at key strategic locations in Asia. It is the largest multi- theatre deal IMAX has ever signed in Asia and increases the number of IMAX theatres scheduled to be open in China by 2008 to nineteen. The deal follows on the heels of extremely successful commercial IMAX theatre openings in Taipei and Kuala Lumpur, which have had tremendous box office success with The Polar Express: An IMAX 3D Experience.

"We have watched IMAX's development for many years, and with the advent of the IMAX MPX system, we feel the IMAX theatre business now offers compelling economics," said Mr. Robert Vallone, the Director and General Manager of LMM. "Presenting the best Hollywood films in IMAX's immersive format will differentiate our multiplexes from surrounding competitors and help us maintain our leadership in the region. We will be expanding our operations in China considerably in the coming years, and we view IMAX as an important part of our development plans in the region."

"We have identified China as a key strategic market for IMAX's growth, and are pleased to be partnering with Lark International Multimedia, a leading exhibitor in this rapidly developing region," said IMAX Co-CEO's and Co-Chairmen Richard L. Gelfond and Bradley J. Wechsler. "The outstanding box office performance of Hollywood films re-mastered into IMAX's format throughout this region has spurred strong interest by Asian exhibitors in differentiating their complexes with IMAX theatres. We believe this deal clearly demonstrates the potential of the IMAX MPX theatre system -- in multiplexes and in Asia."

All six theatres will be capable of playing Hollywood event films converted into the unparalleled image and sound quality of The IMAX Experience(R), as well as original IMAX productions, in both 2D and IMAX(R) 3D. The IMAX MPX theatre system was specifically designed to make it more cost effective for commercial exhibitors to join the IMAX theatre network. The system enables a multiplex operator to more easily add an IMAX theatre to a development by retrofitting an existing stadium seating auditorium or via an economical new build.

About Lark International Multimedia Ltd.

Lark International Multimedia Limited pioneered the operation of US-style multiplex cinema chains in Hong Kong and China. Leveraging its phenomenal success in this area, the company also carried out synergistic expansion into such related fields as film distribution, online ticketing, and cinema advertising sales. The company's subsidiary, UA Cinema Circuit Limited, operates 55 screens in eight cinemas including the number one grossing cinema in Hong Kong. Another subsidiary, Studio City Cinema Holdings Limited owns three multiplex cinemas in China that consistently rank among the top 30 grossing cinemas in China and the top 3 in each of the respective cities in which they operate.

About IMAX Corporation

Founded in 1967, IMAX Corporation is one of the world's leading entertainment technology companies. IMAX's businesses include the creation and delivery of the world's best cinematic presentations using proprietary IMAX and IMAX 3D technology, and the development of the highest quality digital production and presentation. IMAX has developed revolutionary technology called IMAX DMR(R) (Digital Re-mastering) that makes it possible for virtually any 35mm film to be transformed into the unparalleled image and sound quality of The IMAX Experience. The IMAX brand is recognized throughout the world for extraordinary and immersive family entertainment experiences. As of September 31, 2004, there were 240 IMAX theatres operating in 35 countries.

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

This press release contains forward looking statements that are based on management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include the timing of theatre system deliveries, the mix of theatre systems shipped, the timing of the recognition of revenues and expenses on film production and distribution agreements, the performance of films, the viability of new businesses and products, and fluctuations in foreign currency and in the large format and general commercial exhibition market. These factors and other risks and uncertainties are discussed in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2003 and in the subsequent reports filed by the Company with the Securities and Exchange Commission.

SOURCE IMAX Corporation

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