ASSET PURCHASE AND SALE AGREEMENT

EXHIBIT 2.2

________________________________________________________________________________

ASSET PURCHASE AND SALE AGREEMENT

DATED AS OF FEBRUARY 23, 2005

BY AND AMONG

CROWN MEDIA DISTRIBUTION, LLC,

BAGBRIDGE LIMITED

AND, SOLELY WITH RESPECT TO SECTION 10.14 OF THIS AGREEMENT,

CROWN MEDIA HOLDINGS, INC.

________________________________________________________________________________

<PAGE>

TABLE OF CONTENTS

PAGE

ARTICLE 1 CERTAIN DEFINITIONS................................................1

ARTICLE 2 PURCHASE AND SALE.................................................10

2.1 Purchased Assets..................................................10

2.2 Rights under the Excluded License Agreements......................11

2.3 No Assignment in Conflict with Existing Agreements................11

2.4 Compliance with Bulk Sales Law....................................11

2.5 Assumption of Liabilities.........................................11

ARTICLE 3 PURCHASE PRICE AND PAYMENT........................................11

3.1 Purchase Price....................................................11

3.2 Allocation of Purchase Price......................................12

3.3 Post-Closing Purchase Price Adjustment............................12

3.4 Sales Tax.........................................................14

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER..........................14

4.1 Organization and Qualification....................................14

4.2 Authorization and Validity of Agreement...........................14

4.3 No Violation; Consents and Approvals..............................15

4.4 Legal Proceedings.................................................15

4.5 Compliance with Applicable Laws and Permits.......................16

4.6 Taxes.............................................................16

4.7 Contracts.........................................................17

4.8 Liens.............................................................17

4.9 Film Properties and Rights........................................17

4.10 Music Rights......................................................18

4.11 Film Rights and Availabilities of Films...........................18

4.12 Quality of Film Properties........................................19

4.13 Brokers...........................................................19

4.14 Intellectual Property.............................................19

4.15 No Change.........................................................19

4.16 Sale and Leaseback................................................20

4.17 Information.......................................................20

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER...........................20

5.1 Organization and Qualification....................................20

5.2 Authorization and Validity of Agreement...........................20

5.3 No Violation; Consents and Approvals..............................21

5.4 Legal Proceedings.................................................21

5.5 Availability of Funds.............................................21

ARTICLE 6 COVENANTS.........................................................22

<PAGE>

6.1 Access to Information.............................................22

6.2 Information.......................................................22

6.3 Operations in the Ordinary Course of Business.....................22

6.4 Forbearance by Seller.............................................22

6.4 Notification of Claims............................................23

6.6 Regulatory Consents, Authorizations, etc..........................23

6.7 No Inconsistent Action............................................24

6.8 Laboratory Letters................................................24

6.9 Third Party Consents..............................................25

6.10 No Additional Representations.....................................25

6.11 Updating Schedules................................................25

6.12 Financing Commitments.............................................26

6.13 Participations and Residuals......................................26

6.14 Additional Agreements.............................................27

6.15 Confidentiality...................................................28

6.16 Right of First Offer..............................................28

ARTICLE 7 CONDITIONS TO CLOSING.............................................29

7.1 Conditions of Each Party's Obligation to Close....................29

7.2 Conditions to Buyer's Obligation to Close.........................30

7.3 Conditions to Seller's Obligation to Close........................30

7.4 Undertakings......................................................31

ARTICLE 8 THE CLOSING.......................................................31

8.1 Time and Location of Closing......................................31

8.2 Actions by Seller at the Closing..................................31

8.3 Actions by Buyer at the Closing...................................31

ARTICLE 9 INDEMNIFICATION...................................................32

9.1 Indemnification by Seller.........................................32

9.2 Indemnification by Buyer..........................................33

9.3 Defense of Claims.................................................33

9.4 Survival of Representations and Warranties........................34

9.5 Limitation on Rights..............................................34

9.6 Indemnity Payments................................................35

ARTICLE 10 GENERAL PROVISIONS................................................36

10.1 Further Assurances................................................36

10.2 Termination.......................................................36

10.3 Arbitration.......................................................37

10.4 Successors and Assigns............................................38

10.5 No Waiver.........................................................38

10.6 Entire Agreement; Amendments......................................38

10.7 Notices...........................................................39

10.8 Governing Law.....................................................40

10.9 Publicity.........................................................40

10.10 Section Headings..................................................40

<PAGE>

10.11 Severability......................................................40

10.12 No Third-Party Beneficiaries......................................40

10.13 Counterparts......................................................40

10.14 Guarantee.........................................................41

10.15 No Set-Off........................................................43

<PAGE>

Schedules

Seller Disclosure Schedules

Buyer Disclosure Schedules

Exhibits

Exhibit A Form of Assignment and Assumption Agreement

Exhibit B Form of Bill of Sale

Exhibit C Form of Copyright Assignment Agreement

Exhibit D Form of Laboratory Letter

Annexes

Annex A Debt Commitment Letter

Annex B Equity Financing Commitment Letters

<PAGE>

THIS ASSET PURCHASE AND SALE AGREEMENT is made and entered into as of

February 23, 2005 by and among Crown Media Distribution, LLC, a Delaware limited

liability company ("SELLER"), Bagbridge Limited, a company registered in England

and Wales ("BUYER"), and, solely with respect to Section 10.14 of this

Agreement, Crown Media Holdings, Inc., a Delaware corporation ("HOLDINGS").

WHEREAS, Seller owns a library of theatrical films,

made-for-television movies, specials, mini-series, series and other television

programming as described herein; and

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to

sell, assign, transfer and convey to Buyer, certain rights in such library on

the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and of the mutual

covenants, representations, warranties and agreements contained herein, the

parties hereto agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

Capitalized terms not otherwise defined herein shall have the following

meanings when used in this Agreement:

1.1 "2002 ACT" shall be as defined in Section 7.1(c).

1.2 "AFFILIATE" shall mean with respect to any Person, any other

Person that, directly or indirectly, through one or more intermediaries,

Controls, is Controlled by, or is under common Control with, such Person.

1.3 "AGREEMENT" shall mean this Asset Purchase and Sale Agreement as

amended and modified from time to time in accordance with Section 10.6.

1.4 "ANCILLARY RIGHTS" shall mean:

(a) the production, remake, prequel, sequel, serial or series

production rights for programming, based upon, derived from or inspired by any

Film or any part thereof,

(b) the rights to use, exploit and license others to use or exploit

the novelization, publishing or, arising out of or connected with or inspired by

any Film, the characters appearing in any Film or the names or characteristics

of these characters,

(c) the rights to exploit the rights in paragraph (b) above

commercially in connection with or related to any Film or any remakes, prequels,

sequels or other derivative works thereof, and

(d) music publishing rights or merchandising rights relating to any

Film.

<PAGE>

1.5 "ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean the Assignment

and Assumption Agreement substantially in the form attached as Exhibit A.

1.6 "ASSUMED LIABILITIES" shall mean any Liability in, of, or related

to any Purchased Asset arising on or after the Closing Date (other than Retained

Liabilities).

1.7 "AVAILABILITIES SCHEDULE" shall be as defined in Section 4.11(b).

1.8 "BASE AMOUNT" shall be as defined in Section 3.3(c).

1.9 "BILL OF SALE" shall mean the Bill of Sale substantially in the

form attached as Exhibit B.

1.10 "BUYER" shall be as defined in the preamble to this Agreement.

1.11 "BUYER CONFIDENTIAL INFORMATION" shall be as defined in Section

6.15.

1.12 "BUYER MATERIAL ADVERSE EFFECT" shall mean any event, occurrence,

fact, condition, change or effect that has a materially adverse effect on the

ability of Buyer to consummate the transactions contemplated hereby or that

would materially delay or prevent Closing. In this definition, "materially"

means that the financial consequences of the adverse effect or the delay exceeds

$100,000.

1.13 "CASH CONSIDERATION" shall be as defined as in Section 3.1(a).

1.14 "CASH EQUITY" shall be as defined in Section 5.5(b).

1.15 "CLOSING" shall be as defined in Section 8.1.

1.16 "CLOSING DATE" shall be as defined in Section 8.1.

1.17 "CODE" shall mean the Internal Revenue Code of 1986, as amended.

1.18 "COMMITMENTS" shall be as defined in Section 5.5(b).

1.19 "CONFIDENTIAL INFORMATION" shall mean all information relating to

business, financial or other affairs (including, without limitation, future

programming and distribution plans and targets and subscriber counts) that is

not in the public domain.

1.20 "CONFIDENTIAL MEMORANDUM" shall be as defined in Section 6.10.

1.21 "CONFIDENTIALITY AGREEMENT" shall mean the Confidentiality

Agreement dated as of May 11, 2004, by and between Crown Media Holdings, Inc.

and Brooks Production Limited.

1.22 "CONTRACT" shall mean any note, bond, indenture, mortgage, deed

of trust, contract, instrument or other agreement.

-2-

<PAGE>

1.23 "CONTROL" shall mean the possession, directly or indirectly, of

the affirmative power to direct or cause the direction of the management and

policies of a Person (whether through ownership of securities, partnership

interests or other ownership interests, by contract, by membership or

involvement in the board of directors, management committee or management

structure of such Person, or otherwise) and "CONTROLLED" and "CONTROLLING" shall

be construed accordingly.

1.24 "COPYRIGHT ASSIGNMENT" shall mean a short form assignment of

copyright substantially in the form attached as Exhibit C.

1.25 "COPYRIGHT REGISTRATION" shall mean the copyright registration

with respect to the Films, issued by the U.S. Copyright Office in the claimant

or author name of Seller, or such foreign Copyright Office, or equivalent

thereof.

1.26 "CREDIT AGREEMENT" shall mean the Credit, Security, Guaranty and

Pledge Agreement, dated as of August 31, 2001, as amended, among Crown Media

Holdings, Inc., the guarantors named therein, the lenders referred to therein

and JPMorgan Chase Bank, as administrative agent and issuing bank for the

lenders.

1.27 "DEBT AGREEMENT" shall mean the agreement to be entered into by

Buyer, ABN AMRO Bank N.V., Barclays Bank PLC, Societe Generale and others as

contemplated by the Debt Commitment Letter.

1.28 "DEBT COMMITMENT LETTER" shall be as defined in Section 5.5(a).

1.29 "DEBT FINANCING" shall be as defined in Section 5.5(a).

1.30 "EQUITY FINANCING COMMITMENT LETTERS" shall be as defined in

Section 5.5(b).

1.31 "EXCLUDED LICENSE AGREEMENTS" shall mean the Excluded Preexisting

HEI License Agreements and the Excluded Seller License Agreements.

1.32 "EXCLUDED PREEXISTING HEI LICENSE AGREEMENTS" shall mean those

Contracts entered into by Hallmark Entertainment Distribution LLC or any of its

Affiliates or any of their predecessors in interest (or any such Contracts of

which any of them is the assignee, transferee, or beneficiary, in whole or in

part), prior to January 1, 2001 pursuant to which any of them licensed, granted,

conveyed, assigned and/or transferred, in whole or in part, any rights in the

Purchased Assets, to any Person. A true, complete and accurate list of the

Excluded Preexisting HEI License Agreements is set forth on Schedule 1.32.

1.33 "EXCLUDED SELLER LICENSE AGREEMENTS" shall mean those Contracts

set forth on Schedule 1.33.

1.34 "EXPLOITATION" shall mean, in relation to any Film, the release,

sale, distribution, sub-distribution, leasing, sub-leasing, marketing,

licensing, sub-licensing, exhibition, broadcasting or other exploitation of such

Film, and "EXPLOIT" shall be construed accordingly.

-3-

<PAGE>

1.35 "FILM AGREEMENTS" shall mean those Contracts, documents, judicial

awards and/or rulings pursuant to which Seller or its predecessors in interest

acquired from any other Person any of the Film Rights, as such agreements have

been amended from time to time. Such agreements shall include, but not be

limited to, any and all: production services agreements, writer agreements,

literary or other rights acquisition agreements, work-for-hire agreements,

producer agreements, talent agreements, assignment of rights agreements,

assignments of Film Rights, releases and/or any and all other documents,

agreements, letters, releases, contracts, or memoranda, (whether in written or

electronic format) pertaining to the Film Rights of each such Film.

1.36 "FILM PROPERTIES" shall mean all existing and future physical

properties (other than Literary Property) owned or controlled by Seller or,

where Seller does not own or control, to which Seller has rights of access, of

or relating to the Films, including, but not limited to, film, film negatives

and positives; sound effect tracks; master tapes and other duplicating materials

of any kind; original art work; and other tangible elements and materials and

properties in respect of the Films; foreign language dubbed and titled versions;

prints and negatives of stills; trailers and television spots and all

promotional and other advertising and publicity materials of all kinds; cuts,

trims, outtakes and stock footage together with digital copies of any of the

foregoing.

1.37 "FILM RIGHTS" shall mean any and all right and interest outside

the United States of Seller, Crown Media Holdings, Inc. or any of their

respective Subsidiaries in or relating to the Films (other than any Literary

Properties (subject to subsection (e) below) or Ancillary Rights, and subject to

any License Agreements, Excluded License Agreements and Film Agreements),

including, but not limited to, the following:

(a) copyrights, rights and interests in copyrights, renewals and

extensions of copyrights outside the United States, including any such rights

that revert to Seller after the date hereof pursuant the Sale and Leaseback

Rights or otherwise, obtained upon any Film, rights (but not the obligation) to

make publication thereof for copyright purposes and to register claims under

copyright, rights (but not the obligation) to renew and extend such copyrights

and rights (but not the obligation) to sue in the name of any Person for past,

present or future infringements of copyright;

(b) the right to Exploit any Film in any Media in any language outside

the United States or authorize third parties to do so, including, without

limitation, the music synchronization rights for the music composition and

musical recording rights as contained in such Films and language dubbing rights

including, without limitation, the rights to edit, alter, dub, subtitle and

voiceover;

(c) rights to advertise, promote and publicize the Films in any Media

and any language outside the United States in connection with the Exploitation

of the Films outside the United States, including, but not limited to, the right

to create and use trailers and promotional material, the use of synopses of or

brief excerpts from the Films, or from the literary material on which the Films

are based; the use of music and dialogue of the Films, and the names, voices,

images, likenesses and biographies of the lead cast, director, producer,

writers, composers, and other significant personnel or entities rendering

services for or connected with the Films;

-4-

<PAGE>

(d) rights to use in connection with the Exploitation of the Films in

any Media and any language, the soundtrack, the names, credits, logos,

tradenames, trademarks and titles contained in or incorporated into the Films,

trailers, positive prints, preprint materials and video masters of the Films and

marketing, advertising and publicity materials relating to the Films; and

(e) the perpetual, irrevocable, royalty-free, fully paid-up and

non-exclusive right to use the Literary Properties as necessary to Exploit any

Film in any Media and any language outside the United States and to market,

advertise, promote and publicize such Exploitation.

1.38 "FILMS" shall mean the Group A Films and the Group B Films.

1.39 "FINAL RECEIVABLES STATEMENT" shall be as defined in Section

3.3(c).

1.40 "FINANCING" shall be as defined in Section 5.5(b).

1.41 "GAAP" shall mean United States generally accepted accounting

principles as in effect on the date hereof.

1.42 "GOVERNMENTAL ENTITY" shall mean any court, arbitrator,

administrative or other governmental department, agency, commission, authority

or instrumentality, domestic (including federal, state or local) or foreign,

including, without limitation and for the avoidance of doubt, any Tax authority,

the EC Commission, the EFTA Surveillance Authority and any national competition

authority.

1.43 "GROUP A AVAILABILITIES SCHEDULE" shall be as defined in Section

4.11(a).

1.44 "GROUP B AVAILABILITIES SCHEDULE" shall be as defined in Section

4.11(b).

1.45 "GROUP A FILMS" shall mean those Films set forth on Schedule

1.45.

1.46 "GROUP B FILMS" shall mean those Films set forth on Schedule

1.46.

1.47 "GUILD" shall mean the Screen Actors Guild (SAG), American

Federation of Television and Radio Artists (AFTRA), American Federation of

Musicians (AFM), Directors Guild of America (DGA), Writers Guild of America

(WGA), British Equity, ACTRA, DGC, American Society of Composers and all or any

other applicable guilds or unions anywhere in the world.

1.48 "GUILD ASSUMPTION AGREEMENTS" shall mean the standard assumption

agreements required by any Guild in connection with the sale of the Purchased

Assets.

1.49 "HED LIABILITY" shall be as defined in Section 6.14(e).

1.50 "HEI" shall mean Hallmark Entertainment, Inc.

1.51 "HOLDINGS" shall be as defined in the preamble to this Agreement.

1.52 "INDEMNIFIED BUYERS" shall be as defined in Section 9.1.

-5-

<PAGE>

1.53 "INDEMNIFIED SELLER PARTIES" shall be as defined in Section 9.2.

1.54 "INDEPENDENT ACCOUNTANTS" shall mean any of Deloitte & Touche

LLP, PricewaterhouseCoopers LLP, KPMG L.L.P. and Ernst & Young, L.L.P. mutually

acceptable to Buyer and Seller, PROVIDED that if Buyer and Seller do not agree

upon a mutually acceptable public accounting firm within ten days of the first

date of any dispute on which any party elects to submit such dispute to the

Independent Accountants in accordance with the terms of this Agreement, the New

York City office of the American Arbitration Association shall choose an

internationally recognized certified public accounting firm.

1.55 "INTELLECTUAL PROPERTY" shall mean all of the (a) patents, patent

applications, patent disclosures and improvements thereto, (b) trademarks,

service marks, logos, trade names, domain names and corporate names and

registrations and applications for registration thereof, (c) any and all other

intellectual property assets of any nature whatever which may now or in the

future exist in any part of the world, including, but not limited to, all marks

registered in the United States Patent and Trademark Office, (d) copyrights

(including, without limitation, all rights to distribute, reproduce and prepare

derivative works) and registrations and applications for registration thereof,

(e) trade secrets, confidential business information and know-how and (f) any

copies and tangible embodiments thereof (in whatever form or medium).

1.56 "LIABILITY" shall mean, with respect to any Person, any direct or

indirect liability, indebtedness, obligation, commitment, expense, claim, or

guaranty of such Person of any kind, whether accrued or unaccrued, and whether

or not the same is required by applicable GAAP to be accrued on the financial

statements of such Person.

1.57 "LICENSE AGREEMENT" shall mean those Contracts, other than the

Excluded License Agreements, entered into by Seller or Seller's predecessor in

interest (or any such Contracts of which Seller or Seller's predecessor in

interest is the assignee, transferee or beneficiary, in whole or in part), on or

after January 1, 2001 and prior to the date hereof pursuant to which Seller or

Seller's predecessor in interest licensed, in whole or in part, any rights in

the Purchased Assets or granted an option in respect of any of the foregoing, to

any Person, PROVIDED, HOWEVER, that to the extent that such Contracts licensed

any rights in or to assets other than the Purchased Assets, such term shall only

mean those rights under such Contracts that relate to the Purchased Assets.

License Agreements shall be deemed to include any Sale and Leaseback Rights. A

true, accurate and complete list of the material License Agreements as of the

date hereof is set forth on Schedule 1.57.

1.58 "LICENSE PAYMENTS" shall mean all payments due or which may

become due after Closing under the Excluded Preexisting HEI License Agreements

or the Excluded Seller License Agreements, as applicable.

1.59 "LIEN" shall mean any lien, encumbrance, pledge, mortgage, charge

(fixed or floating) under English law, hypothecation, right of set off, right of

pre-emption, assignment by way of security, reservation of title or any other

security interest, howsoever created or arising, claim under bailment or storage

contract.

-6-

<PAGE>

1.60 "LITERARY PROPERTY" shall mean the literary and musical material

upon which, in whole or in part, any Film is based, or which has been used or

included in any Film, including, without limitation, the screenplay, and all

other scripts, scenarios, stories, treatments, movies, outlines, titles,

concepts, manuscripts, recorded music scores and lead sheets or other properties

or materials of any kind or nature, in whatever state of completion and all

drafts, versions and variations thereof.

1.61 "LOSSES" shall be as defined in Section 9.1.

1.62 "MATERIAL CONTRACTS" shall be as defined in Section 4.7.

1.63 "MEDIA" shall mean any and all forms of exhibition and delivery

by every means, method, process, medium or device now or hereafter known,

invented, contemplated or devised throughout the universe, including without

limitation: theatrical, television, Internet, broadband and narrowband digital

delivery, and Videogram (as defined below) exhibition, free (or over-the-air),

cable and basic cable television and community antenna systems, low and full

power television, multi-point distribution systems, wire, fiber optics,

microwave, Telstar-type, DBS, all other forms of satellite and relay television,

so-called "interactive television," video-on-demand, near-video-on-demand,

high-definition television (HDTV) and any and all other kinds of open or closed

circuit systems (as now or hereafter known), only to the extent distribution and

exploitation over such Media occurs solely outside the United States.

1.64 "NOTICE OF DISAGREEMENT" shall be as defined in Section 3.3(b).

1.65 "OUTSIDE DATE" shall be as defined in Section 7.4.

1.66 "PERMIT" shall mean a material permit, license, consent,

approval, certificate, qualification, registration or other authorization or a

filing of a notification report or assessment necessary in any jurisdiction for

the ownership, possession, occupation or use of the Purchased Assets for

Exploitation as currently conducted.

1.67 "PERMITTED LIENS" shall mean (a) Liens for taxes or governmental

assessments, charges or claims the payment of which is not yet due, or for taxes

the validity of which are being contested in good faith; (b) Liens of

laboratories, carriers, warehousemen, mechanics, materialmen and other similar

persons and other Liens imposed by applicable law, other than Liens in respect

of amounts due and owing prior to the Closing, incurred in the ordinary course

of business for sums not yet delinquent or being contested in good faith

exerciseable against Seller; (c) Liens set forth in the agreements related to

the Purchased Assets, access to which has been provided to Buyer; and (d) Liens

granted in connection with tax financings in relation to those sale and

leaseback films set forth on Schedule 4.16.

1.68 "PERSON" shall mean an individual, partnership, corporation,

business trust, limited liability company, limited liability partnership, joint

stock company, trust, unincorporated association, joint venture or other entity

or a Governmental Entity.

1.69 "PURCHASE AND SALE AGREEMENT" shall mean an agreement as of the

date hereof entered into by CM Intermediary LLC, Buyer and, solely with respect

to Section 10.14

-7-

<PAGE>

thereof, Holdings, relating to the acquisition of Crown Media International, LLC

and Crown Entertainment Limited.

1.70 "PURCHASE PRICE" shall be as defined in Section 3.1.

1.71 "PURCHASED ASSETS" shall mean:

(a) the Film Rights,

(b) all the rights of Seller under the Film Agreements outside the

United States,

(c) the Copyright Registration for rights outside the United States,

(d) the right to perpetual, irrevocable, assignable and unconditional

access to and the right to use the Film Properties for purposes of exercising

the rights granted to Buyer hereunder,

(e) the goodwill associated with the foregoing,

(f) the License Agreements and, to the extent Buyer does not make the

election set forth in Section 3.1(b), the Excluded Seller License Agreements,

and

(g) those Contracts entered into by Seller on or after the date hereof

and prior to the Closing pursuant to which Seller licensed, in whole or in part,

any rights in the Purchased Assets or granted an option in respect of any of the

foregoing, to any Person, PROVIDED, HOWEVER, that to the extent that such

Contracts licensed any rights in or to assets other than the Purchased Assets,

such term shall only mean those rights under such Contracts that relate to the

Purchased Assets (the "NEW LICENSE AGREEMENTS");

PROVIDED, HOWEVER, that the Purchased Assets are subject to the License

Agreements and the Excluded License Agreements and shall not include the right

to receive License Payments made or to be made pursuant to the Excluded

Preexisting HEI License Agreements, or in the event Buyer makes the election set

forth in Section 3.1(b), License Payments made or to be made pursuant to the

Excluded Seller License Agreements; and PROVIDED, FURTHER, that notwithstanding

anything to the contrary in this Agreement, the Purchased Assets shall not

include any Retained Assets or be subject to any Retained Liabilities.

1.72 "RECEIVABLES AMOUNT" shall be as defined in Section 3.3(c).

1.73 "RECEIVABLES STATEMENT" shall be as defined in Section 3.3(a).

1.74 "RECEIVING PARTY" shall be as defined in Section 6.15.

1.75 "RELATED PARTY" shall be as defined in Section 6.15.

1.76 "REFUND" shall be as defined in Section 3.3(c).

1.77 "REGULATION" shall be as defined in Section 6.6.

-8-

<PAGE>

1.78 "RETAINED ASSETS" shall mean

(a) any and all assets, contracts and agreements that are not

expressly described as Purchased Assets and all rights and interests, tangible

and intangible, in, of, or related to the Films in the United States, including

the Film Rights in the United States, the rights of Seller under the Film

Agreements in the United States, the Copyright Registration for rights in the

United States, the Film Properties that relate solely or in part to Films

exploited in the United States, and the goodwill associated with the foregoing,

(b) all trademark registrations with respect to the Films in the

United States,

(c) any Ancillary Rights or Literary Properties,

(d) the Excluded Preexisting HEI License Agreements and, in the event

Buyer makes the election set forth in Section 3.1(c), the Excluded Seller

License Agreements, and

(e) the masters and other original copies of the Film Properties

1.79 "RETAINED LIABILITIES" shall mean (a) any Liability in, of, or

related to any Purchased Asset arising prior to the Closing Date and any

Liability in, of, or related to any Excluded Preexisting HEI License Agreement,

and to the extent Buyer makes the election set forth in Section 3.1(b), the

Excluded Seller License Agreements, (b) any Liability to pay any profit

participation due and payable related to any Film Rights, solely to the extent

arising prior to the tenth anniversary of the Closing Date and (c) any Liability

to pay any residual costs due and payable to creative artists or Guilds for the

exploitation of the Film Rights, solely to the extent arising prior to the tenth

anniversary of the Closing Date, no matter whether such exploitation takes

places within or outside the group of Buyer's Affiliates and no matter in which

country such exploitation takes place, so long as such exploitation is pursuant

to licenses granted by Buyer or one of its Affiliates; PROVIDED that Retained

Liabilities shall not include any penalties, interest, fees, or other

Liabilities resulting from Buyer's failure to promptly perform its obligations

under Section 6.13.

1.80 "REVISED RECEIVABLES STATEMENT" shall be as defined in Section

3.3(b).

1.81 "SALE AND LEASEBACK RIGHTS" shall mean rights granted to or

retained by third parties in connection with sale and leaseback and other

financing transactions related to the Films.

1.82 "SECONDARY FILM LOSSES" shall be as defined in Section 9.1.

1.83 "SECTION 6.4 FAILURE" shall be as defined in Section 6.4.

1.84 "SELLER" shall be as defined in the preamble to this Agreement.

1.85 "SELLER CONFIDENTIAL INFORMATION" shall be as defined in Section

6.15.

1.86 "SELLER DISCLOSURE SCHEDULE" shall mean the schedules of Seller

attached hereto.

-9-

<PAGE>

1.87 "SELLER'S INDEMNIFICATION CLAIM" shall be as defined in Section

9.1.

1.88 "SELLER'S KNOWLEDGE" shall mean the actual knowledge of David J.

Evans, Robert Halmi, Jr., William J. Aliber, Charles L. Stanford, Mark Thompson,

Peter Lamberti, Diane Keating or Leslie Park and the knowledge that any of these

individuals would have had if they had made reasonable inquiry in connection

with the (a) normal performance of their respective duties and (b) the sale of

the Purchased Assets.

1.89 "SERVICE AGREEMENT" shall mean the Service Agreement, dated

September 28, 2001, by and between HEI and Holdings, as assigned to Seller

pursuant to letter dated December 14, 2001.

1.90 "SUBSIDIARY" of any Person means any corporation or other entity

of which securities or other ownership interests having ordinary voting power to

elect a majority of the Board of Directors or other Persons performing similar

functions are at the time directly or indirectly owned or Controlled by such

Person or one or more Subsidiaries of such Person.

1.91 "TAX" or "TAXES" shall include all taxes imposed by any U.S.

federal, state, local, foreign or other taxing authority, including all income,

gross receipts, gains profits, windfall profits, gift, severance, ad valorem,

capital, social security, unemployment disability, premium, recapture, credit,

excise, property, sales, use, occupation, service, service use, leasing, leasing

use, value added, transfer, payroll, employment, withholding, estimated,

license, stamp, franchise or similar taxes of any kind whatsoever, including

interest, penalties or additions thereto.

1.92 "TAX RETURN" shall mean any report, return, documents,

declaration or other information (and any supporting schedules or attachments

thereto) required to be supplied to any taxing authority or jurisdiction with

respect to Taxes (including any returns or reports filed on a consolidated,

unitary, or combined basis).

1.93 "UNITED STATES" shall mean the United States of America, its

territories and possessions including Puerto Rico.

1.94 "UPFRONT PAYMENTS" shall be as defined in Section 3.3(c).

1.95 "VIDEOGRAM" shall mean any and all forms of videocassette, DVD,

CD-Rom, videodisc, video cartridge, audiovisual tape, or other device now known

or hereafter devised and designed primarily (but not exclusively) for in-home

exhibition by means of any playback device which causes a visual image (whether

or not synchronized with sound and/or whether or not two or three dimensional)

to be seen through any device now known or hereafter devised.

ARTICLE 2

PURCHASE AND SALE

2.1 PURCHASED ASSETS. Upon the terms and subject to conditions set

forth in this Agreement, Seller shall, at Closing, sell, assign, grant, convey

and deliver to Buyer or

-10-

<PAGE>

Buyer's nominee, and Buyer or Buyer's nominee shall acquire from Seller free

from any Lien, other than Permitted Liens, all of its right, title and interest

in and to the Purchased Assets. For the avoidance of doubt, nothing in this

Agreement shall constitute a transfer of legal or beneficial title of the Film

Properties.

2.2 RIGHTS UNDER THE EXCLUDED LICENSE AGREEMENTS. Seller shall retain

all rights and obligations under the Excluded Preexisting HEI License

Agreements, and in the event Buyer makes the election set forth in Section

3.1(b), the Excluded Seller License Agreements (including the right to receive

and retain License Payments thereunder). If after Closing, Buyer receives any

License Payments attributable to the Excluded Preexisting HEI License Agreements

or the Excluded Seller License Agreements, if applicable, Buyer shall promptly

deliver or pay the same over to Seller in the form as so received (with any

necessary endorsements).

2.3 NO ASSIGNMENT IN CONFLICT WITH EXISTING AGREEMENTS.

Notwithstanding any other provision of this Agreement, this Agreement shall not

constitute an assignment of, or an agreement to assign, any Film Rights if any

attempted assignment thereof without the consent of a third party (a) would

constitute a breach of a Film Agreement or any License Agreement; (b) would in

any other way materially and adversely affect the rights of Seller or Buyer

thereunder or (c) is ineffective so that Buyer would be unable to exercise such

Film Rights with respect to any Film subject to such Film Agreement or License

Agreement. In such event, Seller shall, for the benefit of Buyer, cooperate in

any reasonable arrangement that Buyer may request to enable Buyer to receive and

enjoy the full benefits of the Film Rights, including, without limitation,

collecting payments (without the deduction of any fee or commission for the

account of Seller) for the account and benefit of Buyer.

2.4 COMPLIANCE WITH BULK SALES LAW. Buyer and Seller hereby waive

compliance with the provisions of any bulk sales or transfer laws that may be

applicable to the sale of the Purchased Assets. Seller shall indemnify and hold

Buyer harmless from and against any and all losses, costs, damages, liabilities

and expenses (including, without limitation, reasonable attorneys' fees and

court costs) which Buyer may incur due to, or as a result of, Seller's failure

to comply with any bulk sales or transfer laws which may be applicable to the

transactions contemplated by this Agreement.

2.5 ASSUMPTION OF LIABILITIES. Notwithstanding anything to the

contrary herein, at the Closing, Buyer shall assume and become liable for, and

shall pay, perform and discharge as and when due, the Assumed Liabilities

pursuant to the Assignment and Assumption Agreement.

ARTICLE 3

PURCHASE PRICE AND PAYMENT

3.1 PURCHASE PRICE. The full and complete consideration for the

Purchased Assets shall be as follows (the "PURCHASE PRICE"):

(a) At Closing, Buyer or Buyer's nominee shall pay or procure the

payment to Seller of $180 (One Hundred Eighty) million (subject to adjustment

pursuant to Section 3.1(b)

-11-

<PAGE>

(the "CASH CONSIDERATION") in United States dollars by wire transfer of

immediately available funds to such account as Seller shall direct for the

purchase of the Purchased Assets.

(b) Buyer shall have the right to elect not to purchase the Excluded

Seller License Agreements. In the event Buyer elects in writing not to purchase

the Excluded Seller License Agreements, the Cash Consideration shall be

decreased by $20 million.

3.2 ALLOCATION OF PURCHASE PRICE. Buyer and Seller agree to allocate

the total consideration in accordance with Schedule 3.2. Buyer and Seller shall

(except as may be required by a "determination" within the meaning of Section

1313(a) of the Code or any similar state, local or foreign Tax law) (i) report

the allocation of the total consideration among the Purchased Assets in

accordance with Schedule 3.2 and (ii) act in accordance with Schedule 3.2 (x) in

the preparation and filing of all Tax Returns (including filing Form 8594 with

their respective federal income Tax Returns for the taxable year that includes

the Closing Date and any other forms or statements required by the Code,

Treasury Regulations, the Internal Revenue Service or any applicable state,

local or foreign Tax authority) and (y) in the course of any Tax proceeding.

Buyer and Seller shall promptly inform one another of any challenge by any

Governmental Entity to Schedule 3.2 and agree to consult and keep one another

informed with respect to the status of, and any discussion, proposal or

submission with respect to, such challenge.

3.3 POST-CLOSING PURCHASE PRICE ADJUSTMENT.

(a) CLOSING STATEMENT. As promptly as practicable, but in no event

later than 45 days after the Closing Date, Seller shall cause to be prepared and

delivered to Buyer a statement setting forth the amount of accounts receivable

as of the Closing Date (the "RECEIVABLES STATEMENT") in the format set forth in

Part I of Schedule 3.3(a), certified by Seller's independent certified public

accountants in the form of a review report, to have been prepared on the basis

of the accounting policies and procedures set forth in Part II of Schedule

3.3(a).

(b) DISPUTES. If Buyer in good faith disagrees with the Receivables

Statement, then Buyer shall notify Seller in writing (the "NOTICE OF

DISAGREEMENT") of such disagreement within 30 days after delivery of the

Receivables Statement to Buyer. During such 30-day period, Buyer and its

representatives shall be permitted to review during normal business hours the

working papers of Seller, but not the working papers of Seller's accountants,

relating to the Receivables Statement. The Notice of Disagreement shall set

forth in reasonable detail the basis for the disagreement and specify the

adjustments which, in its opinion, should be made to the Receivables Statement

in order to comply with the requirements of this Agreement. Thereafter, Buyer

and Seller shall attempt in good faith to reconcile their differences, and any

resolution by them as to any disputed items shall be final, binding and

conclusive on the parties and shall be evidenced by a writing signed by Buyer

and Seller, including a revised Receivables Statement reflecting such resolution

(a "REVISED RECEIVABLES STATEMENT"). If Buyer and Seller are unable to resolve

the disagreement within 20 days after delivery of the Notice of Disagreement,

then Buyer and Seller shall instruct the Independent Accountants to resolve the

disputed items and make a determination with respect thereto, which

determination shall be provided to Buyer and Seller by the Independent

Accountants in a written notice, within 30 days after selection of the

Independent Accountants. Buyer and Seller shall instruct the Independent

-12-

<PAGE>

Accountants to include a Revised Receivables Statement in such written notice

provided by the Independent Accountants. The Independent Accountants shall, for

purposes of English law, act as experts and not as arbitrators (as such terms

are understood in English law) in making their final determination, and such

determination shall be final, binding and conclusive upon the parties hereto.

The scope of such Independent Accountants' engagement (which shall not be an

audit) shall be limited to the resolution of the items contained in the Notice

of Disagreement and the recalculation, if any, of the items in the Receivables

Statement in light of such resolution. The following provisions shall apply to

the Independent Accountants' determination: (i) Buyer and/or Buyer's accountants

and Seller and/or Seller's accountants shall each promptly (and in any event

within such time frame as reasonably enables the Independent Accountants to make

their decision in accordance with the time frame set forth in this Section

3.3(b)) prepare and deliver to the Independent Accountants a written statement

on the matters in dispute (together with the relevant documents); (ii) in giving

their determination, the Independent Accountants shall state what adjustments

(if any) are necessary to the preliminary Receivables Statement in respect of

the matters in dispute in order to comply with the requirements of this

Agreement and shall give their reasons therefor; (iii) each of Buyer and Seller

shall bear the costs and expenses of all counsel and other advisers, witnesses

and employees retained by it, and the fees, costs and expenses of the

Independent Accountants, if any, selected in accordance with this Section 3.3(b)

will be shared equally by Buyer, on the one hand, and Seller, on the other hand.

(c) ADJUSTMENT. The Receivables Statement, or, if one has been adopted

pursuant to Section 3.3(b), the Revised Receivables Statement, shall be deemed

to be final, binding and conclusive on Buyer and Seller (the "FINAL RECEIVABLES

STATEMENT") upon the earliest of (i) the failure of Buyer to deliver to Seller

the Notice of Disagreement within 30 days of Seller's delivery of the

Receivables Statement to Buyer; (ii) the resolution of all disputes by Buyer and

Seller, as evidenced by a Revised Receivables Statement and (iii) the resolution

of all disputes by the Independent Accountants, as evidenced by the Revised

Receivables Statement. As used herein, (x) "REFUND" shall mean the amount, if

any, by which the accounts receivable set forth on the Final Receivables

Statement (the "RECEIVABLES AMOUNT") is less than the sum of $4 (Four) million

plus the Upfront Payments (collectively, the "BASE AMOUNT"). In the event that

the Receivable Amount is less than the Base Amount, then within five days after

the Final Receivables Statement is deemed final, binding and conclusive, Seller

shall pay to Buyer or Buyer's nominee the Refund by wire transfer in immediately

available funds to an account specified by Buyer. As used herein, "UPFRONT

PAYMENT" shall mean, in respect of each applicable License Agreement or New

License Agreement the positive amount equal to, (the quotient of "a" divided by

"b") multiplied by "c" where:

a = that number of months by which the term of that License Agreement or New

License Agreement exceeds a period of 18 months following Closing;

b = the total number of months in the term of that License Agreement or New

License Agreement; and

c = the aggregate amount of any cash down payment or other cash advance or

extraordinary payment or any other payment not consistent with pro rata amounts

over the term of such License Agreement or New License Agreement received by

Seller or CMI prior to the Closing Date in respect of such License Agreement or

New License Agreement.

-13-

<PAGE>

and "UPFRONT PAYMENTS" shall mean the aggregate of all such amounts that

constitute an Upfront Payment.

Any adjustments to the Purchase Price made pursuant to this

Section 3.3(c) shall bear interest from the Closing Date through the date of

payment at the rate 1% above the rate of interest publicly announced by

Citibank, N.A., in New York, New York, from time to time as its prime rate.

If any amounts are payable under this Section 3.3(c), Buyer and Seller shall

agree to such consequential adjustments as are reasonably required to any

amounts allocated in accordance with Section 3.2(c).

(d) Subject to any rule of law or regulatory body or any provision of

any contract or arrangement entered into prior to the date of this Agreement to

the contrary, Seller shall procure that each member of Seller's Group (as

defined in the Purchase and Sale Agreement) shall, and Buyer shall procure that

the Group (as defined in the Purchase and Sale Agreement) shall, as promptly as

reasonably practicable, provide each other, the Independent Accountants, Buyer's

accountants and Seller's accountants with all information (in their respective

possession or control) relating to the Purchased Assets, including reasonable

access during normal business hours to books, records and such other relevant

information and all cooperation and assistance as may be reasonably required, to

(i) enable Seller's production of the Calculation Statement and (ii) enable the

Independent Accountants to satisfy their obligations as contemplated hereby, if

necessary.

3.4 SALES TAX. Buyer shall be liable for, and timely pay 75% of, and

Seller shall be liable for, and timely pay, 25% of, any sales, transfer, stamp,

stock transfer, use, real property, goods and services and similar Taxes (other

than any value-added Tax in the United Kingdom, which shall be borne solely by

Buyer) which are payable in connection with the purchase of the Purchased Assets

by Buyer pursuant to this Agreement. Buyer shall prepare the Tax Returns in

connection therewith. Seller shall cooperate with Buyer in the determination of

such Taxes and the preparation of such Tax Returns as reasonably requested by

Buyer.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as disclosed in the Seller Disclosure Schedule, Seller hereby

represents and warrants to Buyer as follows:

4.1 ORGANIZATION AND QUALIFICATION. Seller is a limited liability

company duly organized, validly existing and in good standing under the laws of

the state of Delaware and has all requisite corporate power and authority to

own, license and/or lease the Purchased Assets being transferred by it, and to

carry on its business as now being conducted and as and where the business is

located.

4.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. Seller has all requisite

power and authority to execute and deliver this Agreement and to carry out and

perform its obligations under this Agreement and to consummate the transactions

contemplated hereby. The execution, delivery and performance by Seller of this

Agreement, and the consummation of the transactions

-14-

<PAGE>

contemplated hereby, have been duly and validly authorized by all necessary

action of Seller and no other action on the part of Seller is necessary for the

authorization, execution, delivery or performance by Seller of this Agreement

and the consummation of the transactions contemplated hereby. This Agreement has

been duly executed and delivered by Seller and, assuming the due authorization,

execution and delivery by Buyer constitutes the valid and binding obligation of

Seller enforceable against Seller in accordance with its terms (except insofar

as enforceability may be limited by applicable bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting creditors' rights

generally, or by principles governing the availability of equitable remedies).

4.3 NO VIOLATION; CONSENTS AND APPROVALS. (a) Neither the execution

and delivery of this Agreement by Seller, nor the consummation of the

transactions contemplated hereby, do or would after the giving of notice or the

lapse of time or both, (i) violate, conflict with, result in a breach of, or

constitute a default under, the certificate of incorporation, certificate of

formation, bylaws or other similar governing documents of Seller; (ii) violate

or conflict with in any material respect any U.S. federal, state, local or

foreign law, statute, regulation or court or administrative order or process;

(iii) to Seller's Knowledge, result in the creation of, or give any party the

right to create, any Lien upon the Purchased Assets; (iv) violate or conflict

with in any material respect, or result in the loss of any material right with

respect to or result in a material breach of, or constitute a material default

under, or terminate or give any party the right to terminate, amend, abandon or

refuse to perform any Material Contract to which the Purchased Assets are

subject or bound; (v) modify in any material respect or accelerate, or give any

party thereto the right to modify in any material respect or accelerate the time

within which, or the terms under which, any party is to perform any duties or

obligations or receive any rights or benefits under any agreement or contract

affecting the Purchased Assets; (vi) result in the loss of the benefit of a

Permit held or enjoyed by Seller as of the date of this Agreement in any

applicable jurisdiction or (vii) result in the loss of the benefit of any

Purchased Assets, except for such loss as would not reasonably be expected to be

material to the Exploitation of the Films as currently conducted.

(b) All consents, approvals, authorizations and other requirements

prescribed by law, rule or regulation that are necessary for the execution and

delivery by Seller of this Agreement or the consummation by Seller of the

transactions contemplated by this Agreement have been obtained and satisfied,

other than as required under the antitrust, trade regulation or competition laws

of any jurisdiction or as would not reasonably be expected to have a material

adverse effect on the ability of Seller to consummate the transactions

contemplated hereby.

4.4 LEGAL PROCEEDINGS. There are no, nor have there been during the 18

months ending on the date of this Agreement, any suits, actions, claims or

litigation, or legal, administrative, Guild actions, arbitration, mediation or

other proceedings, or investigations or inquiries of any Governmental Entity

pending or, to Seller's Knowledge, threatened against Seller in respect of the

Purchased Assets, except for such suits, actions, claims or litigation, or

legal, administrative, arbitration, mediation or other proceedings as would not,

individually or, in the case of related claims, in the aggregate, reasonably be

expected to be material to the Purchased Assets taken as a whole, or that

challenge or restrict the ability of Seller to consummate the transactions

contemplated hereby, nor is there any judgment, decree, injunction, ruling,

award, order or writ of any court, governmental department, commission, agency,

Guild,

-15-

<PAGE>

instrumentality, arbitration or other Person outstanding against or binding upon

Seller in respect of the Purchased Assets or that challenges or restricts the

ability of Seller to consummate the transactions contemplated hereby. To

Seller's Knowledge, there are no outstanding threats of legal, administrative,

arbitration, mediation or other proceedings pending in respect of the Purchased

Assets, except for such threats as would not reasonably be expected to be

material to the Purchased Assets taken as a whole.

4.5 COMPLIANCE WITH APPLICABLE LAWS AND PERMITS. (a) Seller is in

compliance with all laws, statutes, ordinances, rules, regulations and orders of

all Governmental Entities applicable to the Purchased Assets, except for such

non-compliance as would not be material to the Purchased Assets taken as a

whole. To Seller's Knowledge, prior to the date hereof there have been no events

of non-compliance with laws, statutes, ordinances, rules, regulations or orders

of Governmental Entities or Guilds applicable to the Purchased Assets that

continue to be, or would reasonably be expected to be, material to the Purchased

Assets taken as a whole.

(b) Seller has obtained all material permits, licenses, consents,

approvals, certificates, qualifications, registrations or other authorizations

or filings of notification reports or assessments required of Seller and

necessary for the Exploitation of the Purchased Assets as currently Exploited by

Seller in each jurisdiction in which such assets are Exploited, and Seller has

complied in all material respects with the terms and conditions of each Permit

and each Permit is in full force and effect. There are no pending or, to

Seller's Knowledge, threatened proceedings which would reasonably be expected to

adversely affect such Permits, and to Seller's Knowledge, no such Permits are

threatened to be suspended, revoked or otherwise rendered invalid.

(c) Seller: (i) has not given any written undertaking, commitment or

assurance to any Governmental Entity in relation to the Purchased Assets; (ii)

is not subject to any order, regulation or decision made by any Governmental

Entity in relation to the Purchased Assets (iii) has not received a written

communication or request for information in relation to the Purchased Assets

from any Governmental Entity, in the case of clauses (i) through (iii) above,

under anti trust or similar legislation applicable to Seller in any

jurisdiction.

(d) To Seller's knowledge, no complaints in relation to the Purchased

Assets have been made or threatened by any third party to any Governmental

Entity under any anti trust or similar legislation.

(e) To Seller's Knowledge, no Group Company (as defined in the

Purchase and Sale Agreement) has ever received, or is expecting to receive, any

aid (in whatever form) from a Member State of the European Community or from

State resources such as could be regarded as State aid for the purposes of

Articles 87 to 89 of the Treaty of Rome.

4.6 TAXES. (a) (i) All Tax Returns required to be filed with respect

to the Purchased Assets have been duly filed (taking into account extensions of

time approved by the appropriate taxing authority) and all such Tax Returns are

true, complete and correct in all material respects; (ii) all Taxes due and

payable with respect to the Purchased Assets have been paid in all material

respects and (iii) there are no material Tax Liens, whether imposed by any

-16-

<PAGE>

U.S. federal, state, county, municipal or foreign taxing authority, outstanding

against the Purchased Assets, except for Permitted Liens.

(b) (i) Seller does not have a Seller's Permit as that term is used in

Section 6006.5(a) of the State of California Revenue and Tax Code, and (ii) to

Seller's Knowledge, Seller has not engaged in any taxable sale in respect of the

Purchased Assets, such that it would be required to have a Seller's Permit as

that term is used in Section 6006.5(a) of the State of California Revenue and

Tax Code. Nothing in this Section 4.6(b) shall affect the sales tax liability

allocation set forth in Section 3.4. Seller shall not have any liability under

Article 9 or otherwise with respect to the representation and warranty in

Section 4.6(b)(ii), other than in determining whether the condition set forth in

Section 7.2(a) has been satisfied.

4.7 CONTRACTS. Seller has provided Buyer with access to true and

complete copies of (a) all material agreements, to which Seller is a party, that

relate to the Purchased Assets and which would reasonably be expected to have a

material effect on the ability of Buyer to Exploit the Films in accordance with

the Availabilities Schedule (other than agreements that will not affect the

Purchased Assets following Closing) and (b) all License Agreements (the

"MATERIAL CONTRACTS"). A true, accurate and complete list of the material

License Agreements as of the date hereof is set forth on Schedule 1.57. As of

the date hereof, other than the Service Agreement, Seller is not party to any

material distribution, advertising or sales agency contracts relating to the

Purchased Assets, except as set forth on Schedule 4.7. Each License Agreement

and, to Seller's Knowledge, each other Material Contract is a valid and binding

agreement, enforceable in accordance with its terms, and in full force and

effect, subject to applicable bankruptcy, insolvency, reorganization, moratorium

and similar laws affecting creditors' rights generally and to general principles

of equity, regardless of whether enforcement is sought in a proceeding at law or

in equity, of Seller and, to Seller's Knowledge, each other party thereto. There

are no material breaches or defaults under any License Agreement by Seller or,

to Seller's Knowledge, by any other party thereto, nor has Seller, or to

Seller's Knowledge, any other party thereto, performed any act or omitted to

perform any act under any such License Agreement which, with notice or lapse of

time or both, will become or result in a material breach or default thereunder.

To Seller's Knowledge, there are no material breaches or defaults under any

Material Contract other than the License Agreements, by Seller or any other

party thereto, nor, to Seller's Knowledge, has Seller or any other party thereto

performed any act or omitted to perform any act under any such Material Contract

which, with notice or lapse of time or both, will become or result in a material

breach or default thereunder or give such party thereto the right to