Exhibit 10.1

EXECUTION COPY

PURCHASE AND SALE AGREEMENT

 

Dated as of October 3, 2006

 

by and among

CROWN MEDIA HOLDINGS, INC.,

CM INTERMEDIARY, LLC,

CROWN MEDIA DISTRIBUTION, LLC

and

RHI ENTERPRISES, LLC

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TABLE OF CONTENTS

ARTICLE 1

 

CERTAIN DEFINITIONS

 

1

 

 

 

 

 

ARTICLE 2

 

PURCHASE AND SALE

 

11

2.1

 

Purchase and Sale of the Company

 

11

 

 

 

 

 

ARTICLE 3

 

PURCHASE PRICE AND PAYMENT

 

11

3.1

 

Purchase Price

 

11

3.2

 

Adjustment of Purchase Price

 

11

3.3

 

Allocation of Purchase Price

 

13

3.4

 

Sales Tax

 

13

 

 

 

 

 

ARTICLE 4

 

REPRESENTATIONS AND WARRATIES OF SELLER AND THE COMPANY

 

13

4.1

 

Organization and Qualification

 

13

4.2

 

Authorization and Validity of Agreement

 

14

4.3

 

No Undisclosed Liabilities

 

14

4.4

 

No Violation; Consents and Approvals

 

14

4.5

 

Legal Proceedings

 

15

4.6

 

Compliance with Applicable Laws

 

15

4.7

 

Absence of Certain Changes

 

15

4.8

 

Employees

 

16

4.9

 

Real Property

 

16

4.10

 

Taxes

 

16

4.11

 

Contracts

 

17

4.12

 

Liens

 

17

4.13

 

Film Properties

 

17

4.14

 

Music Rights

 

18

4.15

 

Availabilities of Group A Films

 

18

4.16

 

Quality of Film Properties

 

18

4.17

 

Brokers

 

18

4.18

 

Intellectual Property

 

19

4.19

 

Ownership by the Company; No Inconsistent Actions

 

19

4.20

 

Bagbridge Agreement

 

19

 

 

 

 

 

ARTICLE 5

 

REPRESENTATIONS AND WARRANTIES OF BUYES

 

19

5.1

 

Organization and Qualification

 

19

5.2

 

Authorization and Validity of Agreement

 

19

5.3

 

No Violation; Consents and Approvals

 

20

5.4

 

Financing Commitment Letters

 

20

 

 

 

 

 

ARTICLE 6

 

COVENANTS

 

20

6.1

 

Access to Information

 

20

6.2

 

Information

 

21

6.3

 

Operations in the Ordinary Course of Business

 

21

6.4

 

Forbearance by Seller

 

21

 

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6.5

 

Operation of Business

 

22

6.6

 

Notification of Claims

 

22

6.7

 

Regulatory Consents, Authorizations, etc

 

22

6.8

 

No Inconsistent Action

 

23

6.9

 

Right of Access

 

23

6.10

 

No Additional Representations

 

23

6.11

 

Tax Matters

 

24

6.12

 

Participations and Residuals

 

27

6.13

 

Additional Obligations Related to Participations and Receivables

 

28

6.14

 

Program License Agreements Payments

 

29

 

 

 

 

 

ARTICLE 7

 

CONDITIONS TO CLOSING

 

29

7.1

 

Conditions of Each Party’s Obligation to Close

 

29

7.2

 

Conditions of Buyer’s Obligation to Close

 

30

7.3

 

Conditions to Seller’s Obligation to Close

 

31

 

 

 

 

 

ARTICLE 8

 

THE CLOSING

 

32

8.1

 

Time and Location of Closing

 

32

8.2

 

Actions by Seller at the Closing

 

32

8.3

 

Actions by Buyer at the Closing

 

33

 

 

 

 

 

ARTICLE 9

 

INDEMNIFICATION

 

34

9.1

 

Indemnification by Seller

 

34

9.2

 

Indemnification by Buyer

 

34

9.3

 

Defense of Claims

 

35

9.4

 

Survival of Representations, Warranties and Covenants

 

36

9.5

 

No Limitation on Rights

 

36

9.6

 

Treatment of Indemnity Payments

 

36

9.7

 

No Right of Contribution

 

36

 

 

 

 

 

ARTICLE 10

 

GENERAL PROVISIONS

 

36

10.1

 

Further Assurances

 

36

10.2

 

Termination

 

37

10.3

 

Dispute Resolution

 

38

10.4

 

Successors and Assigns

 

39

10.5

 

No Waiver

 

39

10.6

 

Entire Agreement; Amendments

 

39

10.7

 

Notices

 

39

10.8

 

Governing Law

 

41

10.9

 

Publicity

 

41

10.10

 

Section Headings

 

41

10.11

 

Severability

 

41

10.12

 

Counterparts

 

41

 

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Schedules

 

Schedule 1.41

Group A Films

Schedule 1.42

Group B Films

Schedule 1.68

Certain Sales Commissions to be Excluded From Retained Liabilities

Schedule 1.71

Sale and Leaseback Transactions

Schedule 1.76

Seller’s Knowledge

Schedule 3.2(b)

A/R Statement Methodology

Schedule 4.7

Certain Changes

Schedule 4.10

Taxes

Schedule 4.11(a)

Contracts

Schedule 4.11(b)

Company License Agreements

Schedule 4.11(c)

Pre-2001 License Agreements

Schedule 4.13

Locations of Film Properties

Schedule 4.15(a)

Group A Availabilities

Schedule 4.15(b)

Group A Profit Participants

Schedule 4.19

Ownership of Assets

Schedule 6.13(c)

Information Submitted or to be Submitted to Entertainment Partners

Schedule 6.14

Program License Agreements Payments

Schedule 7.2(c)

Requisite Consents

 

 

Exhibits

 

Exhibit A

Form of Assignment and Assumption Agreement

Exhibit B

HMCER License Agreement

Exhibit C

Retained Liabilities Assumption Agreement

Exhibit D

Debt Commitment Letter

Exhibit E

Equity Commitment Letter

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THIS PURCHASE AND SALE AGREEMENT is made and entered into as of October 3, 2006
by and among Crown Media Holdings, Inc., a Delaware corporation, CM
Intermediary, LLC, a Delaware limited liability company (collectively,
“Seller”), Crown Media Distribution, LLC, a Delaware limited liability company
(the “Company”), and RHI Enterprises, LLC, a Delaware limited liability company
(“Buyer”).

WHEREAS, CM Intermediary, LLC, an entity wholly owned by Crown Media Holdings
Inc., is the sole member of the Company;

WHEREAS, the Company owns certain rights to a library of theatrical films,
made-for-television movies, specials, mini-series, series and other television
programming;

WHEREAS, as an inducement for Buyer to enter into this Agreement, Seller,
Hallmark Cards, Incorporated, the Company and Buyer have entered into an
Intercreditor Agreement dated as of the date hereof; and

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell,
assign, transfer and convey to Buyer, all of Seller’s interest in the Company 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           “2001 PURCHASE AND SALE AGREEMENT” MEANS THAT CERTAIN PURCHASE AND
SALE AGREEMENT, DATED AS OF APRIL 10, 2001, BY AND BETWEEN CROWN MEDIA HOLDINGS,
INC. AND HALLMARK ENTERTAINMENT DISTRIBUTION, LLC.

1.2           “ACCOUNTING FIRM” SHALL BE DEFINED AS SET FOR IN SECTION 3.2(D).

1.3           “ACCOUNTS RECEIVABLE” ARE ANY AND ALL PAYMENTS DUE UNDER ALL
COMPANY LICENSE AGREEMENTS AS OF THE CLOSING DATE.

1.4           “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;
PROVIDED THAT FOR PURPOSES OF THIS AGREEMENT THE AFFILIATES OF THE COMPANY SHALL
INCLUDE ONLY CROWN MEDIA HOLDINGS INC., AND ITS SUBSIDIARIES AND THAT HALLMARK
CARDS, INCORPORATED, A MISSOURI CORPORATION, AND ITS SUBSIDIARIES, OTHER THAN
CROWN MEDIA HOLDINGS, INC. AND ITS SUBSIDIARIES, SHALL NOT BE AFFILIATES OF THE
SELLER OR THE COMPANY.

1.5           “AGREEMENT” SHALL MEAN THIS PURCHASE AND SALE AGREEMENT AS AMENDED
AND MODIFIED FROM TIME TO TIME.

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1.6           “ANCILLARY RIGHTS” SHALL MEAN ANY COLLATERAL, ALLIED, ANCILLARY OR
SUBSIDIARY RIGHTS OF SELLER, THE COMPANY OR THEIR AFFILIATES DERIVED FROM,
APPURTENANT TO OR RELATED TO ANY FILM OR THE LITERARY PROPERTY, INCLUDING,
WITHOUT LIMITATION, THE PRODUCTION, EXPLOITATION, REISSUE, REMAKE, PREQUEL,
SEQUEL, SERIAL OR SERIES PRODUCTION RIGHTS, WHETHER BASED UPON, DERIVED FROM OR
INSPIRED BY ANY FILM OR THE LITERARY PROPERTY, OR ANY PART THEREOF, RIGHTS TO
USE, EXPLOIT AND LICENSE OTHERS TO USE OR EXPLOIT THE NOVELIZATION, PUBLISHING
OR COMMERCIAL TIE-UPS, INCLUDING THOSE ARISING OUT OF OR CONNECTED WITH OR
INSPIRED BY ANY FILM OR THE LITERARY PROPERTY, THE CHARACTERS APPEARING IN ANY
FILM OR THE LITERARY PROPERTY OR THE NAMES OR CHARACTERISTICS OF THESE
CHARACTERS, AND INCLUDING RIGHTS TO EXPLOIT THE SAME COMMERCIALLY IN CONNECTION
WITH OR RELATED TO ANY FILM OR ANY REMAKES, PREQUELS, SEQUELS, SERIALS OR
SERIES, WHETHER BASED UPON, DERIVED FROM OR INSPIRED BY ANY FILM OR ANY PART
THEREOF, OR OTHER DERIVATIVE WORKS THEREOF OR DERIVED FROM THE LITERARY
PROPERTY, OR MUSIC PUBLISHING RIGHTS OR MERCHANDISING RIGHTS.

1.7           “A/R STATEMENT” SHALL BE AS DEFINED IN SECTION 3.2(C).

1.8           “ASSIGNMENT AND ASSUMPTION AGREEMENT” SHALL MEAN AN AGREEMENT IN
SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT A, PURSUANT TO WHICH BUYER
WILL ACQUIRE ALL OF SELLER’S RIGHT, TITLE AND INTEREST IN THE COMPANY.

1.9           “BAGBRIDGE AGREEMENT” SHALL MEAN THE ASSET PURCHASE AND SALE
AGREEMENT DATED AS OF FEBRUARY 23, 2005, BY AND AMONG CROWN MEDIA HOLDINGS,
INC., THE COMPANY AND BAGBRIDGE LIMITED.

1.10         “BAGBRIDGE RIGHTS” SHALL MEAN ALL RIGHTS AND INTERESTS, TANGIBLE
AND INTANGIBLE, IN, OF, OR RELATED TO THE FILMS TO THE EXTENT SOLD BY CERTAIN
AFFILIATES OF SELLER TO BAGBRIDGE LIMITED PURSUANT TO THE BAGBRIDGE AGREEMENT.

1.11         “BASELINE” SHALL BE AS DEFINED IN SECTION 3.2(A).

1.12         “BUYER” SHALL BE AS DEFINED IN THE PREAMBLE TO THIS AGREEMENT.

1.13         “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.

1.14         INTENTIONALLY OMITTED.

1.15         “CASH CONSIDERATION” SHALL BE AS DEFINED IN SECTION 3.1(A).

1.16         “CLOSING” SHALL BE AS DEFINED IN SECTION 8.1.

1.17         “CLOSING DATE” SHALL BE AS DEFINED IN SECTION 8.1.

1.18         “CODE” SHALL MEAN THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

1.19         “COMPANY” SHALL BE AS DEFINED IN THE PREAMBLE TO THIS AGREEMENT.

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1.20         “COMPANY ASSETS” SHALL MEAN ALL RIGHTS AND INTERESTS, TANGIBLE OR
INTANGIBLE IN, OF, OR RELATED TO THE FILMS, INCLUDING, WITHOUT LIMITATION, THE
FILM RIGHTS (INCLUDING, BUT NOT LIMITED TO, THE LITERARY PROPERTY, THE FILM
PROPERTIES, THE ANCILLARY RIGHTS AND THE OTHER FILM INTELLECTUAL PROPERTY), THE
ACCOUNTS RECEIVABLE, THE RIGHTS OF SELLER AND THE COMPANY UNDER THE COMPANY
LICENSE AGREEMENTS, THE RIGHTS OF SELLER AND THE COMPANY UNDER THE FILM
AGREEMENTS, AND THE GOODWILL ASSOCIATED WITH THE FOREGOING.

1.21         “COMPANY LICENSE AGREEMENTS” ARE THOSE LICENSE AGREEMENTS ENTERED
INTO BY SELLER OR THE COMPANY (OR ANY SUCH LICENSE AGREEMENTS OF WHICH THE
COMPANY WAS THE ASSIGNEE, TRANSFEREE, OR BENEFICIARY, IN WHOLE OR IN PART)
BETWEEN JANUARY 1, 2001 AND THE CLOSING DATE PURSUANT TO WHICH THE COMPANY OR
ANY DESIGNEE ACTING ON BEHALF OF THE COMPANY LICENSED, GRANTED, CONVEYED,
ASSIGNED, AND/OR TRANSFERRED, IN WHOLE OR IN PART, ANY RIGHTS IN THE COMPANY
ASSETS, TO ANY PERSON.

1.22         “CONFIDENTIAL MEMORANDUM” SHALL BE AS DEFINED IN SECTION 6.10.

1.23         “CONFIDENTIALITY AGREEMENT” SHALL MEAN THE CONFIDENTIALITY
AGREEMENT DATED AS OF JULY 6, 2006, BY AND BETWEEN CROWN MEDIA HOLDINGS, INC.
AND KELSO & COMPANY.

1.24         “CONTRACT” SHALL MEAN ANY NOTE, BOND, INDENTURE, MORTGAGE, DEED OF
TRUST, CONTRACT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT.

1.25         “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” SHALL BE CONSTRUED
ACCORDINGLY.

1.26         “CONTROLLING PARTY” SHALL BE AS DEFINED IN SECTION 6.11(F).

1.27         INTENTIONALLY OMITTED.

1.28         “COPYRIGHT REGISTRATIONS” SHALL MEAN THE COPYRIGHT REGISTRATIONS
WITH RESPECT TO THE FILMS, ISSUED BY THE U.S. COPYRIGHT OFFICE OR SUCH FOREIGN
COPYRIGHT OFFICE, OR EQUIVALENT THEREOF, WHEREVER THE FILMS ARE LICENSED,
DISTRIBUTED OR OTHERWISE EXPLOITED.

1.29         “DISPUTE NOTICE” SHALL BE AS DEFINED IN SECTION 3.2(C).

1.30         “ESTIMATED A/R STATEMENT” SHALL BE AS DEFINED IN SECTION 3.2(B).

1.31         “ESTIMATED ADJUSTED ACCOUNTS RECEIVABLE” SHALL BE AS DEFINED IN
SECTION 3.2(B).

1.32         “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.

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1.33         “FILM AGREEMENTS” SHALL MEAN THOSE CONTRACTS, JUDICIAL AWARDS
AND/OR RULINGS PURSUANT TO WHICH SELLER, THE COMPANY, THEIR AFFILIATES OR THEIR
PREDECESSORS IN INTEREST ACQUIRED OR PURCHASED 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 INTELLECTUAL PROPERTY,
RELEASES AND/OR ANY AND ALL OTHER DOCUMENTS, AGREEMENTS, LETTERS, RELEASES,
CONTRACTS, OR MEMORANDA, (WHETHER IN WRITTEN OR ELECTRONIC FORMAT) PERTAINING TO
THE ACQUISITION OF FILM RIGHTS OF EACH SUCH FILM.

1.34         “FILM INTELLECTUAL PROPERTY” SHALL MEAN ALL RIGHT, TITLE AND
INTEREST OF SELLER AND THE COMPANY IN AND TO ANY OF THE INTELLECTUAL PROPERTY
OWNED, USED, HELD, DEVELOPED, OR UNDER DEVELOPMENT RELATED TO THE FILMS,
INCLUDING, BUT NOT LIMITED TO, THE COPYRIGHT REGISTRATIONS AND TRADEMARK
REGISTRATIONS.

1.35         “FILM PROPERTIES” SHALL MEAN ALL EXISTING PHYSICAL PROPERTIES
(OTHER THAN LITERARY PROPERTY) OF OR RELATING TO THE FILMS OWNED OR CONTROLLED
BY SELLER OR THE COMPANY OR TO WHICH SELLER OR THE COMPANY HAS ACCESS, SUBJECT
TO THE BAGBRIDGE RIGHTS THEREIN, 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.

1.36         “FILM RIGHTS” SHALL MEAN ANY AND ALL RIGHT AND INTEREST, TANGIBLE
AND INTANGIBLE, OF SELLER, THE COMPANY AND ANY OF THEIR AFFILIATES IN, OF, OR
RELATING TO THE FILMS, INCLUDING, BUT NOT LIMITED TO, THE FOLLOWING:

(A)           THE LITERARY PROPERTY FOR EACH FILM;

(B)           THE FILM PROPERTIES FOR EACH FILM;

(C)           COPYRIGHTS, RIGHTS AND INTERESTS IN COPYRIGHTS, RENEWALS AND
EXTENSIONS OF COPYRIGHTS, DOMESTIC AND FOREIGN, INCLUDING ANY SUCH RIGHTS
PURSUANT TO THE SALE AND LEASEBACK TRANSACTIONS OR OTHERWISE, OBTAINED UPON OR
IN RELATION TO ANY FILM OR THE LITERARY PROPERTY OR ANY PART THEREOF, 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;

(D)           THE ANCILLARY RIGHTS;

(E)           THE RIGHT TO EXPLOIT (INCLUDING, WITHOUT LIMITATION, BY WAY OF
REMAKE OR PREQUEL) ANY FILM IN ANY MEDIA IN ANY LANGUAGE 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

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LIMITATION, THE RIGHTS TO EDIT, ALTER, DUB, SUBTITLE AND VOICEOVER, IN EACH
INSTANCE SUBJECT TO THE LICENSE AGREEMENTS;

(F)            RIGHTS TO ADVERTISE, PROMOTE AND PUBLICIZE THE FILMS IN ANY MEDIA
AND LANGUAGE IN CONNECTION WITH THE EXPLOITATION OF THE FILMS, INCLUDING THE
RIGHT TO CREATE AND USE TRAILERS AND PROMOTIONAL MATERIALS, THE USE OF SYNOPSES
OF OR BRIEF EXCERPTS FROM THE FILMS, OR FROM THE LITERARY PROPERTY; THE USE OF
THE 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, TO THE FULLEST EXTENT POSSIBLE; PROVIDED, HOWEVER, THAT ALL OF THE
FOREGOING SHALL BE SUBJECT TO THOSE RESTRICTIONS SET FORTH IN THE FILM
AGREEMENTS;

(G)           RIGHTS TO USE IN CONNECTION WITH THE EXPLOITATION OF THE FILMS IN
ANY MEDIA AND LANGUAGE, THE NAMES, CREDITS, LOGOS, TRADE NAMES, TRADEMARKS AND
TITLES CONTAINED IN OR INCORPORATED INTO THE FILMS, TRAILERS, POSITIVE PRINTS,
PREPRINT MATERIALS AND VIDEO MASTERS OF THE FILMS AND ADVERTISING AND PUBLICITY
MATERIALS RELATING TO THE FILMS; AND

(H)           TO THE EXTENT NOT COVERED BY SECTION 1.36(A) THROUGH (G), ALL FILM
INTELLECTUAL PROPERTY.

Notwithstanding anything herein to the contrary, Film Rights shall not include
the Bagbridge Rights.

1.37         “FILMS” SHALL MEAN THE GROUP A FILMS AND THE GROUP B FILMS.

1.38         “GAAP” SHALL MEAN UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES AS IN EFFECT ON THE APPLICABLE DATE.

1.39         “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.

1.40         “GROUP A AVAILABILITIES SCHEDULE” SHALL BE AS DEFINED IN SECTION
4.15(A).

1.41         “GROUP A FILMS” SHALL MEAN THOSE FILMS SET FORTH ON SCHEDULE 1.41.

1.42         “GROUP B FILMS” SHALL MEAN THOSE FILMS SET FORTH ON SCHEDULE 1.42.

1.43         “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, ALLIANCE OF CANADIAN CINEMA TELEVISION AND RADIO ARTISTS
(ACTRA), DIRECTORS GUILD OF CANADA (DGC), AMERICAN SOCIETY OF COMPOSERS, AUTHORS
AND PUBLISHERS (ASCAP), SESAC, INC. (SESAC), BROADCAST MUSIC, INC. (BMI) AND ALL
OTHER APPLICABLE GUILDS, UNIONS OR COLLECTIVES.

1.44         “GUILD ASSUMPTION AGREEMENTS” SHALL MEAN THE STANDARD ASSUMPTION
AGREEMENTS REQUIRED BY ANY GUILD TO BE SIGNED BY BUYER OR AN AFFILIATE IN
CONNECTION WITH THE ACQUISITION OF THE COMPANY.

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1.45         “HMCER LICENSE” SHALL MEAN THE LICENSE TO BE EXECUTED BY BUYER AND
SELLER IN SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT B.

1.46         “INCOME TAX” SHALL MEAN ANY TAX IMPOSED BY ANY UNITED STATES
FEDERAL, STATE, LOCAL AND FOREIGN OR OTHER TAX AUTHORITY WITH RESPECT TO INCOME,
GROSS RECEIPTS, GAINS, PROFITS OR WINDFALL PROFITS.

1.47         “INDEMNIFIED BUYERS” SHALL BE AS DEFINED IN SECTION 9.1.

1.48         “INDEMNIFIED SELLER PARTIES” SHALL BE AS DEFINED IN SECTION 9.2.

1.49         “INTELLECTUAL PROPERTY” SHALL MEAN ALL OF THE FOLLOWING:  (I)
REGISTERED AND UNREGISTERED TRADEMARKS, SERVICE MARKS, NAMES, SLOGANS, LOGOS,
SYMBOLS, TRADE DRESS, AND TRADE NAMES, TRADEMARK AND SERVICE MARK APPLICATIONS,
TRADEMARK AND SERVICE MARK REGISTRATIONS, AND ANY AND ALL GOODWILL SYMBOLIZED
THEREBY AND ASSOCIATED THEREWITH; (II) PATENTS, INCLUDING, WITHOUT LIMITATION,
REISSUES AND REEXAMINED PATENTS, SUBSTITUTES, DIVISIONS, CONTINUATIONS,
CONTINUATIONS-IN-PART, RENEWALS, EXTENSIONS, PATENT DISCLOSURES AND IMPROVEMENTS
THERETO, AND PATENT APPLICATIONS, WHENEVER FILED  AND WHENEVER ISSUED,
INCLUDING, WITHOUT LIMITATION, ALL PRIORITY RIGHTS RESULTING FROM SUCH
APPLICATIONS, DESIGNS, FORMULAS, IDEAS, CONCEPTS, METHODS, PROCESSES,
DISCOVERIES, AND INVENTIONS; (III) COMPUTER SOFTWARE (IN OBJECT CODE AND SOURCE
CODE), PROGRAMS, SYSTEMS, ALGORITHMS, MENU STRUCTURES, SYNTAX, AND APPLICATIONS,
WITH THE EXCEPTION OF COMMERCIALLY AVAILABLE, OFF-THE-SHELF SOFTWARE; (IV) TRADE
SECRETS, INFORMATION, AND KNOW-HOW; (V) REGISTERED AND UNREGISTERED COPYRIGHTS
IN ALL WORKS, INCLUDING, WITHOUT LIMITATION, ALL RIGHTS TO DISTRIBUTE, REPRODUCE
AND PREPARE DERIVATIVE WORKS, SOFTWARE PROGRAMS, COPYRIGHT REGISTRATIONS,
COPYRIGHT RENEWALS, WORKS OF AUTHORSHIP, DATABASES, COPYRIGHT APPLICATIONS, AND
MORAL RIGHTS; (VI) DOMAIN NAMES; (VII) ANY AND ALL OTHER INTELLECTUAL PROPERTY
ASSETS OF ANY NATURE WHATSOEVER; (VIII) ANY COPIES AND TANGIBLE EMBODIMENTS
THEREOF (IN WHATEVER FORM OR MEDIUM); AND (IX) ANY AND ALL RIGHT (INCLUDING THE
RIGHT TO USE), TITLE, AND INTEREST IN AND TO ANY AND ALL OF THE FOREGOING,
INCLUDING, BUT NOT LIMITED TO THE RIGHT TO SUE FOR PAST, PRESENT, AND FUTURE
INFRINGEMENT, MISAPPROPRIATION OR DILUTION.

1.50         “IRS” SHALL MEAN THE UNITED STATES INTERNAL REVENUE SERVICE.

1.51         “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 OR NOT CONTINGENT, 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.

1.52         “LICENSE AGREEMENTS” SHALL MEAN THOSE CONTRACTS ENTERED INTO BY
SELLER OR THE COMPANY, THEIR AFFILIATES OR BY THEIR PREDECESSORS IN INTEREST,
(OR ANY SUCH CONTRACTS OF WHICH SELLER OR THE COMPANY OR THEIR PREDECESSORS IN
INTEREST IS THE ASSIGNEE, TRANSFEREE, OR BENEFICIARY OF, IN WHOLE OR IN PART),
PURSUANT TO WHICH SELLER OR THE COMPANY OR THEIR PREDECESSORS IN INTEREST
LICENSED, GRANTED, CONVEYED, ASSIGNED, AND/OR TRANSFERRED, IN WHOLE OR IN PART,
ANY RIGHTS IN THE COMPANY ASSETS, TO ANY PERSON.  SALE AND LEASEBACK
TRANSACTIONS SHALL BE TREATED AS LICENSE AGREEMENTS REGARDLESS OF WHEN THEY WERE
CONCLUDED.  FOR THE AVOIDANCE OF DOUBT, LICENSE AGREEMENTS SHALL NOT INCLUDE THE
BAGBRIDGE AGREEMENT.

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1.53         “LIEN” SHALL MEAN ANY LIEN, ENCUMBRANCE, PLEDGE, MORTGAGE, SECURITY
INTEREST, CLAIM UNDER BAILMENT OR STORAGE CONTRACT.

1.54         “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, SOUNDTRACKS 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.

1.55         “LOSSES” SHALL BE AS DEFINED IN SECTION 9.1.

1.56         “MATERIAL CONTRACTS” SHALL BE AS DEFINED IN SECTION 4.11.

1.57         “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, PAY AND SUBSCRIPTION 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).

1.58         “PARTICIPATIONS AND RESIDUALS” MEANS ANY (I) PROFIT PARTICIPATION
RELATED TO THE EXPLOITATION OF ANY FILM RIGHTS AND (II) RESIDUAL PAYMENTS DUE TO
CREATIVE ARTISTS OR GUILDS ON ACCOUNT OF THE EXPLOITATION OF THE FILM RIGHTS,
EXCEPT FOR PAYMENTS DUE IN CONNECTION WITH MUSIC LICENSING CONTEMPLATED IN
SECTION 4.14(A).

1.59         “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, IN EACH CASE, IN RESPECT TO
ACCOUNTS 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; (C) LIENS
SECURING EXECUTORY OBLIGATIONS UNDER ANY LEASE ENTERED INTO THROUGH OR ARRANGED
BY SERVICING AGENT THAT CONSTITUTES AN “OPERATING LEASE” UNDER GAAP; (D) LIENS
IN FAVOR OF GUILDS AND THEIR AFFILIATED PENSION AND/OR HEALTH PLANS FOR PROFIT
PARTICIPATIONS AND RESIDUAL COSTS, IN EACH CASE, NOT YET DUE AND PAYABLE; (E)
CUSTOMARY LIENS GRANTED IN THE ORDINARY COURSE TO SECURE THE RIGHTS GRANTED A
LICENSEE UNDER A LICENSE AGREEMENT TO WHICH SUCH LICENSEE IS A PARTY; (F) LIENS
SET FORTH IN THE AGREEMENTS RELATED TO THE COMPANY ASSETS ENTERED INTO THROUGH
OR ARRANGED BY SERVICING AGENT, ACCESS TO WHICH HAS BEEN PROVIDED TO BUYER; AND
(G) LIENS GRANTED IN CONNECTION WITH THE SALE AND LEASEBACK TRANSACTIONS.

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1.60         “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.

1.61         “POTENTIAL CHANGE OF CONTROL” SHALL BE AS DEFINED IN SECTION
6.13(B).

1.62         “POST-CLOSING PERIOD” SHALL MEAN ANY TAXABLE PERIOD BEGINNING AFTER
THE CLOSING DATE.

1.63         “PRE-2001 LICENSE AGREEMENTS” SHALL MEAN THOSE LICENSE AGREEMENTS
ENTERED INTO BY THE PREDECESSORS IN INTEREST OF THE COMPANY (OR ANY SUCH LICENSE
AGREEMENTS OF WHICH THE COMPANY’S PREDECESSORS IN INTEREST WERE THE ASSIGNEES,
TRANSFEREES, OR BENEFICIARIES OF, IN WHOLE OR IN PART) PRIOR TO JANUARY 1, 2001
PURSUANT TO WHICH THE COMPANY’S PREDECESSORS IN INTEREST LICENSED, GRANTED,
CONVEYED, ASSIGNED, AND/OR TRANSFERRED, IN WHOLE OR IN PART, ANY RIGHTS IN THE
COMPANY ASSETS, TO ANY PERSON.

1.64         “PRE-CLOSING PERIOD” SHALL MEAN ANY TAXABLE PERIOD ENDING ON OR
BEFORE THE CLOSING DATE.

1.65         “PROGRAM LICENSE AGREEMENTS” SHALL MEAN (I) THE AMENDED AND
RESTATED PROGRAM LICENSE AGREEMENT DATED JANUARY 1, 2001 AND (II) THE SECOND
AMENDED AND RESTATED PROGRAM LICENSE AGREEMENT DATED JANUARY 1, 2005, IN EACH
CASE, BETWEEN RHI ENTERTAINMENT DISTRIBUTION, LLC (F.K.A. HALLMARK ENTERTAINMENT
DISTRIBUTION, LLC) AND CROWN MEDIA UNITED STATES, LLC, AND AS AMENDED FROM TIME
TO TIME.

1.66         “PURCHASE PRICE” SHALL BE AS DEFINED IN SECTION 3.1.

1.67         “PURCHASE PRICE ADJUSTMENT” SHALL BE AS DEFINED IN SECTION 3.2(A).

1.68         “RETAINED LIABILITIES” SHALL MEAN ALL LIABILITIES OF THE COMPANY
(EXCLUDING ITS SUBSIDIARY WAYZGOOSE) AS OF THE CLOSING DATE OTHER THAN THOSE
LIABILITIES RELATING TO (I) THE COMPANY ASSETS ARISING PRIOR TO JANUARY 1, 2001
OR AFTER THE CLOSING DATE, OR LIABILITIES INCURRED IN THE ORDINARY COURSE OF
BUSINESS PURSUANT TO LICENSE AGREEMENTS ARRANGED BY SERVICING AGENT AND ENTERED
INTO AFTER APRIL 30, 2006, (II) SALE AND LEASEBACK TRANSACTIONS, (III) THE
PRE-2001 LICENSE AGREEMENTS, (IV) THOSE SALES COMMISSIONS DESCRIBED ON SCHEDULE
1.68 ARISING ON ACCOUNT OF REVENUES RECEIVED AFTER THE CLOSING PURSUANT TO
COMPANY LICENSE AGREEMENTS AND (V) ANY TRADE PAYABLE OR OTHER CURRENT
LIABILITIES FOR WHICH A PURCHASE PRICE ADJUSTMENT IS MADE PURSUANT TO SECTION
3.2 (A) HEREOF.  NOTWITHSTANDING ANY PROVISION TO THE CONTRARY, RETAINED
LIABILITIES SHALL INCLUDE, (A) ANY LIABILITY TO PAY ANY PARTICIPATIONS AND
RESIDUALS, INCLUDING ANY PENALTIES, INTEREST, FEES OR OTHER RELATED LIABILITIES,
RELATED TO ANY FILM RIGHTS WHERE THE EVENT GIVING RISE TO SUCH LIABILITY OCCURS
AFTER JANUARY 1, 2001 BUT PRIOR TO THE TENTH ANNIVERSARY OF THE CLOSING DATE
(REGARDLESS OF WHEN SUCH PARTICIPATIONS AND RESIDUALS ARE PAYABLE), SO LONG AS
SUCH EXPLOITATION IS PURSUANT TO LICENSES (INCLUDING THE LICENSES GRANTED
PURSUANT TO THE LICENSE AGREEMENTS) OR OTHER CONTRACTUAL COMMITMENTS GRANTED BY
SELLER, THE COMPANY, BUYER OR ONE OF THEIR RESPECTIVE AFFILIATES, EXCEPT THAT
SUCH RETAINED LIABILITIES SHALL NOT INCLUDE PARTICIPATIONS AND RESIDUALS RELATED
TO THE PRE-2001 LICENSE AGREEMENTS; (B) ANY LIABILITY IN, OF OR RELATED TO THE
BAGBRIDGE AGREEMENT, OTHER THAN SECTIONS 6.14(A), (B), (C) AND (D) AND SECTION
6.16 THEREOF, BUT INCLUDING, WITHOUT LIMITATION, ANY LIABILITY RELATING TO THE

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PAYMENT OF ANY PARTICIPATIONS AND RESIDUALS THEREUNDER; AND (C) ANY LIABILITY
WITH RESPECT TO TAXES INCURRED OR IMPOSED ON OR WITH RESPECT TO THE COMPANY, THE
COMPANY ASSETS, COMPANY LICENSE AGREEMENTS, OR THE INCOME, PROPERTIES OR
OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES FOR ANY TAX PERIOD (OR PORTION
THEREOF) ENDING ON OR BEFORE THE CLOSING DATE EXCLUDING TAX LIABILITIES RELATING
TO SALE AND LEASEBACK TRANSACTIONS; PROVIDED THAT RETAINED LIABILITIES SHALL NOT
INCLUDE ANY PENALTIES, INTEREST, FEES, OR OTHER LIABILITIES RESULTING SOLELY
FROM BUYER’S FAILURE TO TIMELY PERFORM ITS OBLIGATIONS UNDER SECTION 6.12.  FOR
THE AVOIDANCE OF DOUBT, RETAINED LIABILITIES INCLUDES ALL LIABILITIES TO SELLER
OR ITS AFFILIATES OR HALLMARK CARDS, INCORPORATED OR ITS SUBSIDIARIES.

1.69         “RETAINED LIABILITIES ASSUMPTION AGREEMENT” SHALL MEAN AN AGREEMENT
IN SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT C, PURSUANT TO WHICH THE
COMPANY WILL ASSIGN TO SELLER, AND SELLER WILL ASSUME FROM THE COMPANY, THE
RETAINED LIABILITIES.

1.70         “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.

1.71         “SALE AND LEASEBACK TRANSACTIONS” SHALL MEAN ANY AGREEMENT RELATING
TO SALE AND LEASEBACK RIGHTS AND SET FORTH ON SCHEDULE 1.71.

1.72         “SELLER” SHALL BE AS DEFINED IN THE PREAMBLE TO THIS AGREEMENT.

1.73         “SELLER DISCLOSURE SCHEDULE” SHALL MEAN THE SCHEDULES OF SELLER
ATTACHED HERETO.

1.74         “SELLER’S AFFILIATED GROUP” SHALL MEAN ANY UNITARY, COMBINED OR
CONSOLIDATED GROUP OF WHICH THE SELLER IS A MEMBER FOR UNITED STATES, FEDERAL,
STATE OR LOCAL TAX PURPOSES.

1.75         “SELLER’S INDEMNIFICATION CLAIM” SHALL BE AS DEFINED IN SECTION
9.1.

1.76         “SELLER’S KNOWLEDGE” SHALL MEAN THE ACTUAL KNOWLEDGE OF ANY OF THE
PERSONS SET FORTH ON SCHEDULE 1.76.  THE PARTIES ACKNOWLEDGE THAT THE SECTIONS
OF THE SELLER DISCLOSURE SCHEDULE LISTING INFORMATION REQUIRED BY SECTIONS 4.5,
4.11, 4.13, 4.14 4.15, 4.16 AND 4.18 WILL BE BASED PRIMARILY ON INFORMATION
PROVIDED TO SELLER, THE COMPANY OR THEIR AFFILIATES BY SERVICING AGENT AND IN
SUCH CIRCUMSTANCES QUALIFICATIONS AS TO SELLER’S KNOWLEDGE SHALL MEAN THE
PERSONS ON SCHEDULE 1.76 HAVE NO ACTUAL KNOWLEDGE OF ANY INACCURACIES REGARDING
ANY SUCH INFORMATION PROVIDED BY SERVICING AGENT, AND SUCH PERSONS SHALL NOT
HAVE ANY IMPLIED DUTY TO PERFORM AN INDEPENDENT VERIFICATION OF THE ACCURACY OF
SUCH INFORMATION.

1.77         “SERVICING AGENT” MEANS RHI ENTERTAINMENT, LLC OR ANY RELATED
PERSONS PERFORMING CERTAIN SALES, MARKETING AND OTHER SERVICES IN CONNECTION
WITH THE FILMS PURSUANT TO THAT CERTAIN LIBRARY SERVICES AGREEMENT BY AND
BETWEEN CROWN MEDIA HOLDINGS, INC. AND HALLMARK ENTERTAINMENT, INC. (PREDECESSOR
IN INTEREST TO RHI ENTERTAINMENT, LLC), DATED AS OF SEPTEMBER 28, 2001, AS
AMENDED OR EXTENDED FROM TIME TO TIME.

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1.78         “STRADDLE PERIOD” SHALL MEAN ANY TAXABLE PERIOD BEGINNING BEFORE
THE CLOSING DATE AND ENDING AFTER THE CLOSING DATE.

1.79         “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.

1.80         “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, COMMERCIAL RENT, 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.

1.81         “TAX CONTEST” SHALL BE AS DEFINED IN SECTION 6.11(F).

1.82         “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).

1.83         INTENTIONALLY OMITTED.

1.84         “TRADEMARK REGISTRATIONS” SHALL MEAN THE TRADEMARK REGISTRATIONS
WITH RESPECT TO THE FILMS, BOTH FOREIGN AND DOMESTIC, WHEREVER THE FILMS ARE
LICENSED, DISTRIBUTED OR OTHERWISE EXPLOITED.

1.85         “VIDEO-ON-DEMAND AGREEMENTS” MEANS THE VOD LICENSE AGREEMENT
BETWEEN CROWN MEDIA UNITED STATES, LLC AND COMCAST CABLE COMMUNICATIONS, LLC,
DATED AS OF OCTOBER 4, 2004 AND ANY OTHER SIMILAR AGREEMENTS WITH THIRD PARTIES
RELATED TO “VIDEO-ON-DEMAND” EXHIBITION TO THE EXTENT SUCH AGREEMENTS GRANT
RIGHTS TO THE FILMS.

1.86         “VIDEOGRAM” SHALL MEAN ANY AND ALL FORMS OF VIDEOCASSETTE, DVD,
CD-ROM, VIDEODISC, VIDEO CARTRIDGE, AUDIOVISUAL TAPE, OR OTHER SIMILAR DEVICE
NOW KNOWN OR HEREAFTER DEVISED AND DESIGNED PRIMARILY (BUT NOT EXCLUSIVELY) FOR
IN-HOME EXHIBITION BY MEANS OF A VCR, DVD PLAYER OR OTHER PLAYBACK DEVICE WHICH
CAUSES A VISUAL IMAGE (WHETHER OR NOT SYNCHRONIZED WITH SOUND) TO BE SEEN ON THE
SCREEN OF A TELEVISION RECEIVER OR ANY COMPARABLE DEVICE NOW KNOWN OR HEREAFTER
DEVISED.

1.87         “WARNER BROS. LICENSE AGREEMENT” SHALL MEAN THE DISTRIBUTION
AGREEMENT DATED AS OF MAY 22, 2006 BY AND BETWEEN WARNER BROS. DOMESTIC CABLE
DISTRIBUTION (“WARNER BROS.”) AND THE COMPANY.

1.88         “WAYZGOOSE, LTD.” SHALL BE AS DEFINED IN SECTION 4.1(C).

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ARTICLE 2

PURCHASE AND SALE

2.1           PURCHASE AND SALE OF THE COMPANY.  UPON THE TERMS AND SUBJECT TO
CONDITIONS SET FORTH IN THIS AGREEMENT, SELLER SHALL AT THE CLOSING SELL,
ASSIGN, GRANT, CONVEY AND DELIVER TO BUYER, AND BUYER SHALL ACQUIRE FROM SELLER
WITH EFFECT FROM THE CLOSING, ALL OF ITS RIGHT, TITLE AND INTEREST IN AND TO THE
COMPANY FREE AND CLEAR OF ALL LIENS, EXCEPT FOR PERMITTED LIENS.

ARTICLE 3

PURCHASE PRICE AND PAYMENT

3.1           PURCHASE PRICE.  THE FULL AND COMPLETE CONSIDERATION FOR THE
SELLER’S INTEREST IN THE COMPANY SHALL BE AS FOLLOWS (THE “PURCHASE PRICE”):

(A)           AT THE CLOSING, BUYER SHALL PAY TO SELLER $160.0 MILLION (THE
“CASH CONSIDERATION”; PROVIDED THAT THE CASH CONSIDERATION SHALL BE SUBJECT TO
ADJUSTMENT PURSUANT TO SECTION 3.2) IN UNITED STATES DOLLARS BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS TO SUCH ACCOUNT AS SELLER SHALL DIRECT FOR THE
PURCHASE OF THE COMPANY.

(B)           AT THE CLOSING, SELLER SHALL ASSIGN TO BUYER ALL OF SELLER’S
RIGHT, TITLE AND INTEREST IN THE COMPANY PURSUANT TO THE ASSIGNMENT AND
ASSUMPTION AGREEMENT AND BUYER SHALL ASSUME SELLER’S OBLIGATIONS ARISING AFTER
THE DATE OF THE CLOSING UNDER THE OPERATING AGREEMENT OF THE COMPANY.

3.2           ADJUSTMENT OF PURCHASE PRICE.  (A)  THE PURCHASE PRICE SHALL BE
ADJUSTED IN ACCORDANCE WITH THIS SECTION 3.2 TO THE EXTENT THAT (I)(A) THE
ACCOUNTS RECEIVABLE (INCLUDING ACCOUNTS RECEIVABLE WITH RESPECT TO WHICH PAYMENT
HAS BEEN RECEIVED BY THE SERVICING AGENT BUT NOT REMITTED TO SELLER AS OF THE
CLOSING DATE, BUT EXCLUDING ACCOUNTS RECEIVABLE RELATED TO COMPANY LICENSE
AGREEMENTS ENTERED INTO ON OR AFTER APRIL 30, 2006), NET ONLY OF AN ALLOWANCE
FOR DOUBTFUL ACCOUNTS, LESS (B) THE AMOUNT OF ANY CASH RECEIVED BY SELLER OR THE
COMPANY (AND NOT PAID TO BUYER) RELATED TO COMPANY LICENSE AGREEMENTS ENTERED
INTO ON OR AFTER APRIL 30, 2006, LESS (C) THE AMOUNT OF ANY TRADE PAYABLES OR
OTHER CURRENT LIABILITIES AS OF THE CLOSING DATE (THE AMOUNT REFERRED TO IN THIS
CLAUSE (I), THE “ADJUSTED ACCOUNTS RECEIVABLE”), DIFFERS FROM (II) $16,535,000,
WHICH SELLER AND THE COMPANY REPRESENT WAS THE BALANCE OF THE ACCOUNTS
RECEIVABLE AS OF APRIL 30, 2006 (EXCLUDING RECEIVABLES ATTRIBUTABLE TO
NON-UNITED STATES FILM LICENSEE FEES) DETERMINED IN ACCORDANCE WITH THE
PROCEDURES SET FORTH ON SCHEDULE 3.2(B) ATTACHED HERETO (THE AMOUNT REFERRED TO
IN THIS CLAUSE (II), THE “BASELINE”).

(B)           NO LATER THAN 5 DAYS PRIOR TO THE CLOSING DATE, SELLER SHALL
PREPARE, OR CAUSE TO BE PREPARED, AND DELIVER TO BUYER AN ESTIMATED STATEMENT OF
THE ADJUSTED ACCOUNTS RECEIVABLE (THE “ESTIMATED A/R STATEMENT”), WHICH SHALL
INCLUDE AN ESTIMATE OF THE ADJUSTED ACCOUNTS RECEIVABLE (THE “ESTIMATED ADJUSTED
ACCOUNTS RECEIVABLE”).  THE ESTIMATED A/R STATEMENT SHALL BE PREPARED IN
ACCORDANCE WITH SECTION 3.2(A) AND THE PROCEDURES SET FORTH ON SCHEDULE 3.2(B)
ATTACHED HERETO AND SHALL BE BASED ON THE ACCOUNTS RECEIVABLE REPORT PREPARED IN
THE ORDINARY COURSE OF BUSINESS OF THE COMPANY AS OF THE LAST DAY OF THE
CALENDAR MONTH IMMEDIATELY PRECEDING THE TENTH DAY PRIOR TO THE CLOSING DATE. 
IF THE ESTIMATED ADJUSTED

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ACCOUNTS RECEIVABLE IS LESS THAN THE BASELINE, THEN THE PURCHASE PRICE SHALL BE
REDUCED BY AN AMOUNT EQUAL TO SUCH DIFFERENCE.  IF THE ESTIMATED ADJUSTED
ACCOUNTS RECEIVABLE EXCEEDS THE BASELINE, THEN THE PURCHASE PRICE SHALL BE
INCREASED BY AN AMOUNT EQUAL TO SUCH EXCESS.

(C)           NO LATER THAN 60 DAYS FOLLOWING THE CLOSING DATE, BUYER SHALL
PREPARE, OR CAUSE TO BE PREPARED, AND DELIVER TO SELLER A FINAL STATEMENT OF THE
ADJUSTED ACCOUNTS RECEIVABLE (THE “A/R STATEMENT”).  THE A/R STATEMENT SHALL BE
PREPARED IN ACCORDANCE WITH SECTION 3.2(A) AND THE PROCEDURES SET FORTH ON
SCHEDULE 3.2(B) ATTACHED HERETO.  SELLER SHALL PROVIDE BUYER AND ITS ADVISORS
REASONABLE ACCESS TO THE BOOKS AND RECORDS OF SELLER IN CONNECTION WITH THE
PREPARATION OF THE A/R STATEMENT.  UPON RECEIPT OF THE A/R STATEMENT, SELLER
SHALL HAVE 30 DAYS FOLLOWING THE RECEIPT THEREOF TO REVIEW SUCH STATEMENT AND,
IN CONNECTION THEREWITH, SELLER SHALL HAVE FULL ACCESS (DURING NORMAL BUSINESS
HOURS AND WITHOUT DISRUPTION TO THE OPERATIONS OF THE COMPANY) TO THE BUYER’S
AND THE COMPANY’S OFFICERS, EMPLOYEES, ACCOUNTANTS AND OTHER REPRESENTATIVES AND
THE BOOKS AND RECORDS REASONABLY RELATED TO THE A/R STATEMENT CALCULATION.  IF
AS A RESULT OF SUCH REVIEW, SELLER DISAGREES WITH BUYER’S FINAL A/R STATEMENT,
SELLER SHALL DELIVER TO BUYER A WRITTEN NOTICE OF DISAGREEMENT (A “DISPUTE
NOTICE”) PRIOR TO THE EXPIRATION OF THE 30 DAY REVIEW PERIOD, SETTING FORTH THE
BASIS FOR SUCH DISPUTE IN REASONABLE DETAIL.  IF SELLER DOES NOT DELIVER A
DISPUTE NOTICE WITHIN SUCH 30 DAY PERIOD, THEN THE A/R STATEMENT AS OF THE
CLOSING DATE SHALL BE FINAL AND BINDING ON BUYER AND SELLER.

(D)           IF SELLER DELIVERS A DISPUTE NOTICE TO BUYER IN A TIMELY MANNER,
THEN, NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN SECTION 10.3, BUYER
AND SELLER SHALL ATTEMPT IN GOOD FAITH TO RESOLVE SUCH DISPUTE WITHIN 30 DAYS
FROM THE DATE OF SUCH DISPUTE NOTICE.  SUCH NEGOTIATIONS SHALL BE CONDUCTED BY
MANAGERS OR EXECUTIVE OFFICERS OF EACH PARTY WHO HAVE AUTHORIZATION TO RESOLVE
SUCH DISPUTE.  IF BUYER AND SELLER CANNOT REACH AGREEMENT WITHIN SUCH 30 DAYS
PERIOD, THEN, SUCH DISPUTE WILL BE SUBMITTED FOR RESOLUTION TO A NATIONALLY
RECOGNIZED ACCOUNTING FIRM (THE “ACCOUNTING FIRM”) MUTUALLY AGREED UPON BY BOTH
PARTIES, IF AND TO THE EXTENT THAT SUCH ACCOUNTING FIRM AGREES TO RESOLVE THE
DISPUTE WITHOUT CONDUCTING AN AUDIT OR PREPARING AN ATTEST REPORT.  THE PARTIES
SHALL SHARE EQUALLY THE COST OF THE ACCOUNTING FIRM.  IN THE EVENT THAT THE
PARTIES CANNOT FIND AN ACCOUNTING FIRM WILLING TO RESOLVE THE DISPUTE IN
ACCORDANCE WITH THE FOREGOING PROCEDURES WITHIN 15 DAYS, THEN SUCH DISPUTE WILL
BE SUBJECT TO MEDIATION AND, IF NECESSARY, SUBMITTED TO FINAL AND BINDING
ARBITRATION, PURSUANT TO SECTION 10.3  OF THIS AGREEMENT.

(E)           IF, PURSUANT TO CLAUSES (C) OR (D) OF THIS SECTION 3.2, IT IS
FINALLY DETERMINED THAT THE ADJUSTED ACCOUNTS RECEIVABLE WAS LESS THAN THE
ESTIMATED ADJUSTED ACCOUNTS RECEIVABLE, THEN SELLER SHALL, WITHIN 10 BUSINESS
DAYS FROM THE DATE OF SUCH FINAL DETERMINATION, PAY TO THE BUYER THE AMOUNT
EQUAL TO SUCH DIFFERENCE, TOGETHER WITH INTEREST THEREON AT THE RATE OF 10% PER
ANNUM FROM THE CLOSING DATE TO THE DATE OF PAYMENT, SUCH CASH PAYMENT TO BE MADE
BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO SUCH BANK ACCOUNT AS BUYER
MAY DESIGNATE (OR, IN THE ABSENCE OF ANY SUCH DESIGNATION, BY CORPORATE CHECK
DELIVERED TO BUYER).

(F)            IF, PURSUANT TO CLAUSES (C) OR (D) OF THIS SECTION 3.2, IT IS
FINALLY DETERMINED THAT THE ADJUSTED ACCOUNTS RECEIVABLE WAS GREATER THAN THE
ESTIMATED ADJUSTED ACCOUNTS RECEIVABLE, THEN BUYER SHALL, WITHIN 10 BUSINESS
DAYS OF THE DATE OF SUCH FINAL DETERMINATION, PAY TO SELLER, THE AMOUNT EQUAL TO
SUCH DIFFERENCE, TOGETHER WITH INTEREST THEREON AT THE RATE OF 10% PER ANNUM
FROM THE CLOSING DATE TO THE DATE OF PAYMENT, SUCH CASH PAYMENT TO BE MADE BY
WIRE

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TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO SUCH BANK ACCOUNT AS SELLER MAY
DESIGNATE (OR IN THE ABSENCE OF SUCH DESIGNATION, BY CORPORATE CHECK DELIVERED
TO SELLER).

3.3           ALLOCATION OF PURCHASE PRICE.  BUYER SHALL PREPARE A PROPOSED
ALLOCATION OF THE TOTAL CONSIDERATION AMONG THE ASSETS OF THE COMPANY AS SOON AS
PRACTICABLE AFTER CLOSING AND SELLER SHALL HAVE THE RIGHT TO REVIEW AND MAKE
REASONABLE COMMENTS ON SUCH PROPOSED ALLOCATION.  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 ASSETS OF THE COMPANY IN
ACCORDANCE WITH THE ALLOCATION MADE PURSUANT TO THIS SECTION 3.3 AND (II) ACT IN
ACCORDANCE WITH SUCH ALLOCATION (X) IN THE PREPARATION AND FILING OF ALL TAX
RETURNS (INCLUDING FILING ANY FORMS OR STATEMENTS REQUIRED BY THE CODE, TREASURY
REGULATIONS, THE IRS OR ANY APPLICABLE STATE OR LOCAL 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 THE ALLOCATION MADE
PURSUANT TO THIS SECTION 3.3 AFTER THE CLOSING 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.

3.4           SALES TAX.  BUYER SHALL BE LIABLE FOR, AND TIMELY PAY ANY SALES,
TRANSFER, STAMP, STOCK TRANSFER, USE, REAL PROPERTY, GOODS AND SERVICES AND
SIMILAR TAXES THAT ARE PAYABLE IN CONNECTION WITH THE PURCHASE OF ALL OF
SELLER’S RIGHT, TITLE AND INTEREST IN AND TO THE COMPANY BY BUYER PURSUANT TO
THIS AGREEMENT.  BUYER AND SELLER SHALL COOPERATE IN TIMELY MAKING ALL FILINGS,
RETURNS, REPORTS AND FORMS AS MAY BE REQUIRED IN CONNECTION WITH THE PAYMENT OF
SUCH TAXES.  SELLER AND BUYER, AS APPROPRIATE, SHALL EXECUTE AND DELIVER ALL
INSTRUMENTS AND CERTIFICATES NECESSARY TO ENABLE THE OTHER TO COMPLY WITH ANY
FILING REQUIREMENTS AND/OR LAWS RELATING TO SUCH TAXES.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY

Except as disclosed in the Seller Disclosure Schedule, Seller and the Company
hereby represent and warrant to Buyer as follows:

4.1           ORGANIZATION AND QUALIFICATION.

(A)           CROWN MEDIA HOLDINGS, INC. IS A CORPORATION DULY FORMED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE AND HAS
ALL REQUISITE CORPORATE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS IT IS
NOW BEING CONDUCTED AS AND WHERE THE BUSINESS IS LOCATED.

(B)           CM INTERMEDIARY, LLC 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 LIMITED LIABILITY COMPANY POWER AND AUTHORITY TO
OWN, LICENSE AND DISPOSE OF ITS ASSETS AND TO CARRY ON ITS BUSINESS AS IT IS NOW
BEING CONDUCTED AS AND WHERE THE BUSINESS IS LOCATED.

(C)           THE COMPANY 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 LIMITED LIABILITY COMPANY POWER AND AUTHORITY TO OWN, LICENSE AND
DISPOSE OF ITS ASSETS AND TO

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CARRY ON ITS BUSINESS AS IT IS NOW BEING CONDUCTED AS AND WHERE THE BUSINESS IS
LOCATED. THE COMPANY DOES NOT HAVE ANY SUBSIDIARIES OR OTHERWISE HOLD ANY EQUITY
INTERESTS IN OTHER ENTITIES OTHER THAN AN INTEREST IN WAYZGOOSE CONCERTS
SERVICES B.V., A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY (“WAYZGOOSE”).  NEITHER
THE COMPANY NOR ANY SELLER HAS EVER CAUSED WAYZGOOSE TO CONDUCT ANY BUSINESS OR
INCUR ANY LIABILITY EXCEPT AT THE EXPRESS DIRECTION OF SERVICING AGENT.

4.2           AUTHORIZATION AND VALIDITY OF AGREEMENT.  EACH OF SELLER AND THE
COMPANY 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 AND THE COMPANY OF THIS AGREEMENT, AND THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY, HAVE BEEN DULY AND VALIDLY AUTHORIZED BY
ALL NECESSARY ACTION OF SELLER AND THE COMPANY AND NO OTHER ACTION ON THE PART
OF SELLER OR THE COMPANY IS NECESSARY FOR THE AUTHORIZATION, EXECUTION, DELIVERY
OR PERFORMANCE BY SELLER OR THE COMPANY OF THIS AGREEMENT AND THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED HEREBY.  THIS AGREEMENT HAS BEEN DULY EXECUTED
AND DELIVERED BY SELLER AND THE COMPANY AND, ASSUMING THE DUE AUTHORIZATION,
EXECUTION AND DELIVERY BY BUYER, CONSTITUTES THE VALID AND BINDING OBLIGATION OF
SELLER AND THE COMPANY, ENFORCEABLE AGAINST SELLER AND THE COMPANY 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 UNDISCLOSED LIABILITIES.  EXCEPT FOR LIABILITIES AND
OBLIGATIONS SET FORTH ON SCHEDULE 1.64 OR INCURRED IN THE ORDINARY COURSE OF
BUSINESS PURSUANT TO FILM AGREEMENTS, LICENSE AGREEMENTS OR OTHER AGREEMENTS, IN
EACH CASE, WHERE THE SERVICING AGENT WAS INVOLVED IN THE NEGOTIATION OR DRAFTING
OF SUCH AGREEMENT (INCLUDING OBLIGATIONS TO PAY SALES COMMISSIONS ON ACCOUNT OF
REVENUES RECEIVED AFTER THE CLOSING PURSUANT TO COMPANY LICENSE AGREEMENTS), THE
COMPANY HAS NO LIABILITIES OR OBLIGATIONS.

4.4           NO VIOLATION; CONSENTS AND APPROVALS.  (A)  NEITHER THE EXECUTION
AND DELIVERY OF THIS AGREEMENT BY SELLER OR THE COMPANY, 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 FORMATION OR OTHER SIMILAR
GOVERNING DOCUMENTS OF SELLER OR THE COMPANY OR ANY U.S. FEDERAL, STATE OR LOCAL
COURT OR ADMINISTRATIVE ORDER OR PROCESS, OR ANY AGREEMENT, CONTRACT, OR OTHER
INSTRUMENT, TO WHICH SELLER OR THE COMPANY IS A PARTY OR BY WHICH THE COMPANY’S
ASSETS ARE SUBJECT OR BOUND; (II) VIOLATE OR CONFLICT WITH ANY U.S. FEDERAL,
STATE OR LOCAL LAW, STATUTE OR REGULATION; (III) RESULT IN THE CREATION OR
VESTING OF ANY RIGHT OF PAYMENT TO ANY THIRD PARTY, OR GIVE ANY PARTY THE RIGHT
TO CREATE, ANY LIEN UPON THE ASSETS OF THE COMPANY; (IV) TERMINATE OR GIVE ANY
PARTY THE RIGHT TO TERMINATE, AMEND, ABANDON OR REFUSE TO PERFORM ANY AGREEMENT
OR CONTRACT TO WHICH THE COMPANY’S ASSETS ARE SUBJECT OR BOUND; OR (V)
ACCELERATE OR MODIFY, OR GIVE ANY PARTY THERETO THE RIGHT TO ACCELERATE OR
MODIFY, 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 COMPANY’S ASSETS.

(B)           EXCEPT FOR THE WAITING PERIOD UNDER THE HART SCOTT RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, ALL CONSENTS, APPROVALS,
AUTHORIZATIONS AND OTHER

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REQUIREMENTS PRESCRIBED BY LAW, RULE OR REGULATION WHICH MUST BE OBTAINED OR
SATISFIED BY SELLER OR THE COMPANY AND THAT ARE NECESSARY FOR THE EXECUTION AND
DELIVERY BY SELLER AND THE COMPANY OF THIS AGREEMENT AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT HAVE BEEN OBTAINED AND SATISFIED,
OTHER THAN AS WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT
ON THE ASSETS OR LIABILITIES OF THE COMPANY OR THE ABILITY OF SELLER OR THE
COMPANY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREIN.

4.5           LEGAL PROCEEDINGS.  THERE ARE NO, NOR HAVE THERE BEEN DURING THE
THREE YEARS ENDING ON THE DATE OF THIS AGREEMENT ANY SUITS, ACTIONS, CLAIMS
RECEIVED DIRECTLY BY SELLERS OR THE COMPANY OR LITIGATION, OR LEGAL,
ADMINISTRATIVE, ARBITRATION, MEDIATION OR OTHER PROCEEDINGS OR GOVERNMENTAL
INVESTIGATIONS OR INQUIRIES, PAST, CURRENT, PENDING OR, TO SELLER’S KNOWLEDGE,
THREATENED AGAINST THE COMPANY (OTHER THAN GUILD CLAIMS OR AUDITS IN THE
ORDINARY COURSE OF BUSINESS, NOTICE OF WHICH WAS GIVEN TO SERVICING AGENT) OR
THAT CHALLENGES THE SELLER’S OR THE COMPANY’S ABILITY TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY, NOR IS THERE ANY JUDGMENT, DECREE, INJUNCTION,
RULING, AWARD, ORDER OR WRIT OF ANY GOVERNMENTAL ENTITY OR OTHER PERSON
OUTSTANDING AGAINST OR BINDING UPON THE COMPANY OR TO THE SELLER’S KNOWLEDGE,
RELATING TO THE COMPANY ASSETS, OR OTHERWISE AFFECTING THE ABILITY OF SELLER OR
THE COMPANY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.  NEITHER THE
SELLER NOR THE COMPANY IS SUBJECT TO, OR IN DEFAULT UNDER, ANY JUDGMENT, ORDER,
INJUNCTION OR DECREE OF ANY GOVERNMENTAL ENTITY IN RESPECT OF THE COMPANY ASSETS
WHICH WOULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY’S ABILITY TO EXPLOIT,
LICENSE, ASSIGN, TRANSFER, SELL OR OTHERWISE DEAL WITH THE COMPANY ASSETS
FOLLOWING THE CLOSING.

4.6           COMPLIANCE WITH APPLICABLE LAWS.  SELLER AND THE COMPANY ARE, AND
AT ALL TIMES DURING THE THREE YEARS ENDING ON THE DATE OF THIS AGREEMENT HAVE
BEEN, IN COMPLIANCE WITH ALL LAWS, STATUTES, ORDINANCES, RULES, REGULATIONS AND
ORDERS OF ALL GOVERNMENTAL ENTITIES APPLICABLE TO THE COMPANY AND THE COMPANY
ASSETS, EXCEPT FOR SUCH NON-COMPLIANCE AS WOULD NOT BE MATERIAL TO THE COMPANY
OR THE COMPANY ASSETS AS A WHOLE.

4.7           ABSENCE OF CERTAIN CHANGES.  FROM APRIL 30, 2006 THROUGH THE DATE
HEREOF, AND EXCEPT AS OTHERWISE CONTEMPLATED BY THIS AGREEMENT, AND EXCEPT AS
SET FORTH IN SCHEDULE 4.7, THE BUSINESS OF THE COMPANY HAS BEEN CONDUCTED ONLY
IN THE ORDINARY COURSE, CONSISTENT WITH PAST PRACTICE, AND:

(A)           THE COMPANY HAS NOT SUFFERED ANY MATERIAL CHANGE IN ITS ASSETS,
INCLUDING, BUT NOT LIMITED TO, THE COMPANY ASSETS, OR LIABILITIES;

(B)           THE COMPANY HAS NOT, THROUGH THE DATE HEREOF DECLARED, PAID OR SET
ASIDE FOR PAYMENT ANY DISTRIBUTION IN RESPECT OF ITS EQUITY INTERESTS OR
REDEEMED, PURCHASED OR OTHERWISE ACQUIRED, DIRECTLY OR INDIRECTLY, ANY EQUITY
INTERESTS OF THE COMPANY;

(C)           THE COMPANY HAS NOT MADE ANY SALE, DISPOSAL OR TRANSFER OF ANY
ASSETS, INCLUDING, BUT NOT LIMITED TO, THE COMPANY ASSETS, BY WAY OF THE
EXECUTION OF ANY COMPANY LICENSE AGREEMENT OR OTHERWISE, EXCEPT PURSUANT TO
AGREEMENTS IN WHICH THE SERVICING AGENT WAS INVOLVED IN THE NEGOTIATION OR
DRAFTING OF SUCH AGREEMENT;

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(D)           THE COMPANY HAS NOT, EXCEPT IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE, AMENDED OR WAIVED ANY MATERIAL RIGHT UNDER, OR
TERMINATED, ANY MATERIAL CONTRACT;

(E)           THE COMPANY HAS NOT INCURRED ANY CAPITAL EXPENDITURES; AND

(F)            THE COMPANY HAS NOT ENTERED INTO ANY AGREEMENT, CONTRACT,
COMMITMENT OR ARRANGEMENT TO DO ANY OF THE FOREGOING.

4.8           EMPLOYEES.  THE COMPANY DOES NOT HAVE, AND HAS NEVER HAD, ANY
EMPLOYEES.

4.9           REAL PROPERTY.  THE COMPANY DOES NOT, AND HAS NEVER, OWNED OR
LEASED ANY REAL PROPERTY.

4.10         TAXES.  (A)  ALL MATERIAL TAX RETURNS REQUIRED TO BE FILED ON OR
BEFORE THE CLOSING DATE BY OR ON BEHALF OF THE COMPANY (AND WITH RESPECT TO THE
INCOME, PROPERTIES OR OPERATIONS OF THE COMPANY AND EACH OF ITS SUBSIDIARIES)
AND WITH RESPECT TO SELLER’S INTEREST IN THE COMPANY HAVE BEEN TIMELY 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; (B) ALL MATERIAL TAXES DUE AND PAYABLE OR REQUIRED TO BE
DEDUCTED OR WITHHELD BY OR WITH RESPECT TO THE COMPANY (AND WITH RESPECT TO THE
INCOME, PROPERTIES OR OPERATIONS OF THE COMPANY AND EACH OF ITS SUBSIDIARIES)
AND WITH RESPECT TO SELLER’S INTEREST IN THE COMPANY HAVE BEEN TIMELY DEDUCTED,
WITHHELD OR PAID; (C) THERE ARE NO TAX LIENS, WHETHER IMPOSED BY ANY U.S.
FEDERAL, STATE, COUNTY, MUNICIPAL OR FOREIGN TAXING AUTHORITY, OUTSTANDING
AGAINST THE COMPANY, OR ANY OF THE ASSETS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, EXCEPT FOR PERMITTED LIENS; (D) EXCEPT AS SET FORTH ON SCHEDULE
4.10, NONE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES HAS WAIVED ANY STATUTE OF
LIMITATIONS WITH RESPECT TO TAXES WHICH WAIVER REMAINS IN EFFECT; (E) EXCEPT AS
SET FORTH ON SCHEDULE 4.10, THERE ARE NO PENDING (OR THREATENED IN WRITING)
AUDITS, EXAMINATIONS, INVESTIGATIONS OR OTHER PROCEEDINGS IN RESPECT OF MATERIAL
TAXES OR MATERIAL TAX RETURNS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES (OR WITH
RESPECT TO THE INCOME, PROPERTIES OR OPERATIONS OF ANY OF THEM); (F) NEITHER THE
COMPANY NOR ANY OF ITS SUBSIDIARIES IS OBLIGATED TO MAKE ANY PAYMENTS, OR IS A
PARTY TO ANY AGREEMENT THAT UNDER CERTAIN CIRCUMSTANCES COULD OBLIGATE IT TO
MAKE ANY PAYMENTS THAT WOULD NOT BE DEDUCTIBLE UNDER SECTION 280G OF THE CODE
(OR SUBSTANTIALLY SIMILAR PROVISION UNDER FOREIGN LAW); (G) NEITHER THE COMPANY
NOR ANY OF ITS SUBSIDIARIES IS A PARTY TO OR BOUND BY ANY TAX ALLOCATION OR
SHARING AGREEMENT; (H) THE COMPANY AND ITS SUBSIDIARIES HOLD NO “UNITED STATES
REAL PROPERTY INTERESTS” WITHIN THE MEANING OF SECTION 897(C) OF THE CODE; (I)
THE COMPANY IS A “DISREGARDED ENTITY” FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES AND IS WHOLLY-OWNED BY CM INTERMEDIARY, LLC; (J) ALL TAX RETURNS,
EXAMINATION REPORTS AND STATEMENTS OF DEFICIENCIES ASSESSED WITH RESPECT TO THE
COMPANY AND ITS SUBSIDIARIES (AND WITH RESPECT TO THE INCOME, PROPERTIES OR
OPERATIONS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES) MADE AVAILABLE TO BUYER
ARE CORRECT AND COMPLETE; AND (K) THERE HAS BEEN NO SALE OR TRANSFER (INCLUDING
BY WAY OF LIQUIDATION) OF ANY TANGIBLE MATERIAL ASSETS, AND NO ASSUMPTION OF
MATERIAL LIABILITIES IN CONNECTION WITH ANY SALE OR TRANSFER OF TANGIBLE ASSETS,
(EXCLUDING ANY LICENSING OF FILMS IN THE ORDINARY COURSE OF BUSINESS) OWNED
DIRECTLY OR INDIRECTLY BY THE COMPANY OR ANY OF ITS SUBSIDIARIES DURING THE
TAXABLE YEAR OF 2006, EXCLUDING ANY SALE OR

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TRANSFER FOR WHICH ANY APPLICABLE SALES OR TRANSFER (OR SIMILAR) TAXES HAVE
ALREADY BEEN PAID AND EXCLUDING ANY SALE OR TRANSFER OCCURRING OR DEEMED TO
OCCUR AS A RESULT OF THIS AGREEMENT.

4.11         CONTRACTS.  TO SELLER’S KNOWLEDGE: (I) AN ACCURATE, COMPLETE AND
UP-TO-DATE LIST OF ALL MATERIAL CONTRACTS TO WHICH THE COMPANY IS A PARTY
(WHETHER OR NOT RELATED TO THE COMPANY ASSETS) IS SET OUT ON SCHEDULE 4.11(A);
(II) AN ACCURATE, COMPLETE AND UP-TO-DATE LIST OF ALL COMPANY LICENSE AGREEMENTS
IS SET OUT ON SCHEDULE 4.11(B); AND (III) AN ACCURATE, COMPLETE AND UP-TO-DATE
LIST OF ALL PRE-2001 LICENSE AGREEMENTS IS SET OUT ON SCHEDULE 4.11(C). 
TOGETHER, THESE MATERIAL AGREEMENTS, COMPANY LICENSE AGREEMENTS AND PRE-2001
LICENSE AGREEMENTS ARE DEFINED HEREIN AS THE “MATERIAL CONTRACTS”.  TO SELLER’S
KNOWLEDGE, EACH MATERIAL CONTRACT IS A VALID AND LEGALLY BINDING OBLIGATION OF
THE COMPANY AND ANY COUNTERPARTY THERETO, AND IS IN FULL FORCE AND EFFECT.  TO
SELLER’S KNOWLEDGE, ALL MATERIAL OBLIGATIONS REQUIRED TO BE PERFORMED UNDER THE
MATERIAL CONTRACTS AS OF THE DATE HEREOF BY THE COMPANY HAVE BEEN PERFORMED, AND
NEITHER THE COMPANY NOR ANY OTHER PARTY TO ANY MATERIAL CONTRACT IS IN DEFAULT
IN ANY MATERIAL RESPECT UNDER THE TERMS THEREOF.  TO SELLER’S KNOWLEDGE, THERE
ARE NO, NOR HAVE THERE BEEN ANY, MATERIAL BREACHES OR DEFAULTS UNDER ANY
MATERIAL CONTRACT TO WHICH THE COMPANY IS A PARTY, BY WHICH THE COMPANY IS
BOUND, OR PURSUANT TO WHICH THE COMPANY HAS ANY RIGHTS, BY THE COMPANY OR BY ANY
OTHER PARTY THERETO, WHICH COULD RESULT IN ANY COUNTERPARTY TO SUCH MATERIAL
CONTRACT BECOMING ENTITLED TO ANY DAMAGES OR GIVING RISE TO ANY RIGHT OF
TERMINATION. AS OF THE DATE HEREOF, NONE OF SELLER, THE COMPANY OR ANY OF THEIR
SUBSIDIARIES HAS RECEIVED ANY WRITTEN NOTICE OF TERMINATION OF ANY MATERIAL
CONTRACT NOR, TO SELLER’S KNOWLEDGE, ARE THERE ANY PENDING OR THREATENED NOTICES
OF TERMINATION BY ANY PARTY TO ANY MATERIAL CONTRACT. TO SELLER’S KNOWLEDGE,
EACH MATERIAL CONTRACT IS IN FULL FORCE AND EFFECT IN ALL MATERIAL RESPECTS AND
UPON CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, WILL CONTINUE TO BE
LEGAL, VALID, AND BINDING AND IN FULL FORCE AND EFFECT ON TERMS IDENTICAL TO
THOSE IN EFFECT IMMEDIATELY PRIOR TO THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY.  NO ACTION, CLAIM, SUIT, PROCEEDING, OR INVESTIGATION IS
PENDING OR, TO SELLER’S KNOWLEDGE, IS BEING OR HAS BEEN THREATENED NOR HAS ANY
CLAIM OR DEMAND BEEN MADE, WHICH CHALLENGES THE LEGALITY, VALIDITY, OR
ENFORCEABILITY OF ANY SUCH MATERIAL CONTRACT.  WITHOUT LIMITING THE FOREGOING,
TO THE EXTENT REFLECTED IN ALL RELEVANT INFORMATION PROVIDED BY BUYER OR ITS
AFFILIATES, ALL AMOUNTS DUE AND OWING ON THE DATE HEREOF WITH RESPECT TO (I)
PROFIT PARTICIPATIONS RELATED TO ANY FILM RIGHTS AND THE BAGBRIDGE RIGHTS BASED
UPON LICENSES (INCLUDING THE LICENSES GRANTED PURSUANT TO THE LICENSE
AGREEMENTS) OR OTHER CONTRACTUAL COMMITMENTS AND (II) RESIDUAL COSTS DUE TO
CREATIVE ARTISTS OR GUILDS FOR THE EXPLOITATION OF FILM RIGHTS AND THE BAGBRIDGE
RIGHTS BASED UPON LICENSES (INCLUDING THE LICENSES GRANTED PURSUANT TO THE
LICENSE AGREEMENTS) OR OTHER CONTRACTUAL COMMITMENTS, IN EACH CASE, HAVE BEEN
PAID IN FULL.

4.12         LIENS.  THE COMPANY’S ASSETS TRANSFERRED HEREUNDER ARE, AND SHALL
BE AT THE CLOSING, FREE AND CLEAR OF ANY AND ALL LIENS, OTHER THAN PERMITTED
LIENS.

4.13         FILM PROPERTIES.  TO SELLER’S KNOWLEDGE, SCHEDULE 4.13 SETS FORTH A
TRUE, CORRECT AND COMPLETE LIST OF THE LOCATIONS OF ALL OF THE FILM PROPERTIES,
THE LOCATION AND THE PARTIES AND LABORATORIES WITH WHOM THE FILM PROPERTIES ARE
DEPOSITED OR KEPT AND INDICATES WHETHER SUCH FILM PROPERTIES ARE OWNED BY THE
COMPANY AND, WHERE NOT OWNED BY THE COMPANY, WHAT RIGHTS OF ACCESS SELLER HAS
THERETO.  THE COMPANY HAS NOT SOLD, ASSIGNED, LEASED, LICENSED, GRANTED,
MORTGAGED, PLEDGED, SUBJECTED TO ANY LIEN OR OTHERWISE CONVEYED, TRANSFERRED OR
DISPOSED OF ANY OF THE FILM RIGHTS TO ANY PERSON OTHER THAN PURSUANT TO THE
COMPANY LICENSE AGREEMENTS AND

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NONE OF THE COMPANY LICENSE AGREEMENTS WERE ENTERED INTO BY SELLER OR ONE OF ITS
AFFILIATES ON OR AFTER APRIL 30, 2006.

4.14         MUSIC RIGHTS.  TO SELLER’S KNOWLEDGE, THE SMALL PERFORMANCE RIGHTS
IN THE MUSIC CONTAINED IN THE FILMS ARE EITHER:  (A) CONTROLLED BY AND AVAILABLE
FOR LICENSING FROM ASCAP, BMI, SESAC OR SIMILAR MUSIC PERFORMANCE RIGHTS
SOCIETIES; (B) IN THE PUBLIC DOMAIN; OR (C) CONTROLLED BY SELLER OR THE COMPANY
AND NOT AVAILABLE FOR LICENSING THROUGH THE MUSIC PERFORMANCE RIGHTS SOCIETIES
(IN WHICH CASE SUCH SMALL PERFORMANCE RIGHTS CONTROLLED BY SELLER SHALL BE
DEEMED LICENSED TO THE COMPANY HEREBY BY WAY OF IRREVOCABLE, PERPETUAL,
ROYALTY-FREE, FULLY-PAID UP, WORLDWIDE LICENSE TO USE SUCH MUSIC FOR THE PURPOSE
OF EXPLOITING THE FILM RIGHTS.)

4.15         AVAILABILITIES OF GROUP A FILMS.

(A)           TO SELLER’S KNOWLEDGE, SCHEDULE 4.15(A) SETS FORTH A TRUE,
ACCURATE AND COMPLETE LIST OF THE FOLLOWING RIGHTS BY TITLE WITH RESPECT TO ALL
OF THE GROUP A FILMS: (I) THE AVAILABILITY (WHETHER SOLD OR NOT SOLD) OF PAY
TELEVISION RIGHTS, FREE TELEVISION RIGHTS, AND VIDEOGRAM RIGHTS; (II) IF SUCH
RIGHTS ARE NOT CURRENTLY AVAILABLE FOR EXPLOITATION IN THE CATEGORIES SET OUT IN
THE PRECEDING CLAUSE (I), EITHER THE CURRENT CUSTOMER, IF THE DURATION OF RIGHTS
GRANTED IS CO-TERMINOUS WITH COMPANY’S DURATION OF OWNERSHIP OR CONTROL OF SUCH
RIGHTS, OR, THE CUSTOMER FOR THE FINAL SALE MADE BY THE COMPANY (ANY INTERVENING
CUSTOMERS ARE SET FORTH IN THE ‘DETAILED WINDOWS’ OF THIS SCHEDULE); (III)
WHETHER THE SALE IS EXCLUSIVE OR NON-EXCLUSIVE; (IV) WHEN SUCH CUSTOMER’S RIGHTS
EXPIRE; AND (V) THE EXPIRATION DATE OF THE FILM RIGHTS (THE “GROUP A
AVAILABILITIES SCHEDULE”). TO SELLER’S KNOWLEDGE, THE GROUP A FILMS WILL BE
AVAILABLE FOR EXPLOITATION BY THE COMPANY AS INDICATED IN THE GROUP A
AVAILABILITIES SCHEDULE, AND ALL SUCH RIGHTS WILL BE AVAILABLE FOR ASSIGNMENT OR
TRANSFER BY THE COMPANY TO THIRD PARTIES AFTER THE CLOSING.  BUYER ACKNOWLEDGES
CERTAIN GROUP A FILMS HAVE LIMITED OR NO AVAILABLE DISTRIBUTION RIGHTS AS
IDENTIFIED IN THE GROUP A AVAILABILITIES SCHEDULE.  TO SELLER’S KNOWLEDGE, THERE
ARE NO MATERIAL LIMITATIONS ON THE EXPLOITATION OF THE GROUP A FILMS SET FORTH
IN THE GROUP A AVAILABILITIES SCHEDULE OTHER THAN AS SET FORTH THEREIN OR
PURSUANT TO ANY LICENSE AGREEMENT.

(B)           TO SELLER’S KNOWLEDGE, SCHEDULE 4.15(B) SETS FORTH A TRUE,
COMPLETE AND CORRECT LIST OF THE PROFIT PARTICIPANTS RELATED TO THE GROUP A
FILMS.

4.16         QUALITY OF FILM PROPERTIES.  TO SELLER’S KNOWLEDGE, (A) THERE ARE
SUFFICIENT FILM PROPERTIES RELATING TO THE GROUP A FILMS WHICH ARE OF SUITABLE
TECHNICAL QUALITY TO CREATE COPIES OF THE GROUP A FILMS FOR EXPLOITATION BY
MAJOR TELEVISION EXHIBITORS AND VIDEOGRAM COMPANIES AT THE PRESENT TIME IN
CONVENTIONAL 525 NTSC TELEVISION FORMATS AND (B)  SELLER HAS IN ITS POSSESSION,
OR HAS ACCESS PURSUANT TO WRITTEN AGREEMENTS WITH LABORATORIES, OR OTHERWISE,
SUFFICIENT MATERIALS RELATING TO EACH GROUP A FILM TO ENABLE BUYER TO
MANUFACTURE ONE-INCH, D3 OR BETA FORMAT NTSC VIDEOGRAMS TO EXERCISE THE FILM
RIGHTS.  EACH GROUP A FILM IS COMPLETED AND READY FOR EXHIBITION AND
DISTRIBUTION FOR USE BY THE COMPANY AS SET FORTH IN THE GROUP A AVAILABILITIES
SCHEDULE.

4.17         BROKERS.  EXCEPT FOR SALEM PARTNERS LLC, NONE OF SELLER OR ANY OF
ITS SUBSIDIARIES HAS EMPLOYED ANY BROKER OR FINDER OR INCURRED ANY LIABILITY FOR
ANY BROKER’S FEES, COMMISSIONS OR FINDER’S FEES IN CONNECTION WITH THE SALE OF
THE COMPANY OR RELATED TRANSACTIONS

 

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CONTEMPLATED BY THIS AGREEMENT.  SELLER OR A SUBSIDIARY OF SELLER, AS
APPLICABLE, SHALL BE SOLELY LIABLE FOR ALL FEES, COMMISSIONS AND/OR FINDER’S
FEES PAYABLE OR OWING (WHETHER DEMANDED OR NOT) TO SALEM PARTNERS LLC EXCEPT FOR
MATTERS WHERE BUYER OR ITS AFFILIATES HAVE SEPARATELY ENGAGED SALEM PARTNERS
LLC.

4.18         INTELLECTUAL PROPERTY.  THE COMPANY OWNS EXCLUSIVELY AND SOLELY, OR
HAS THE VALID RIGHT AND TITLE TO USE, AND HAS GOOD AND MARKETABLE TITLE TO ALL
OF THE FILM RIGHTS, FREE AND CLEAR OF ALL LIENS (EXCEPT PERMITTED LIENS).  TO
SELLER’S KNOWLEDGE, USE OF THE FILM RIGHTS HAS NOT VIOLATED OR INFRINGED UPON OR
INTERFERED WITH, AND IS NOT CURRENTLY VIOLATING OR INFRINGING UPON OR
INTERFERING WITH, THIRD PARTY-OWNED INTELLECTUAL PROPERTY.  TO SELLER’S
KNOWLEDGE, NO PERSON IS VIOLATING OR INFRINGING UPON OR INTERFERING WITH, OR HAS
VIOLATED OR INFRINGED UPON OR INTERFERED WITH AT ANY TIME, ANY FILM RIGHTS.  NO
INTELLECTUAL PROPERTY OTHER THAN THE FILM RIGHTS IS REQUIRED BY BUYER TO EXPLOIT
THE FILMS AND MAKE THE FILMS AVAILABLE AS PROVIDED IN SCHEDULE 4.15(A), EXCEPT
TO THE EXTENT LIMITED BY THE BAGBRIDGE RIGHTS.

4.19         OWNERSHIP BY THE COMPANY; NO INCONSISTENT ACTIONS.  EXCEPT (A) WITH
RESPECT TO TRANSFERS DIRECTLY OR INDIRECTLY TO THE COMPANY, (B) PURSUANT TO THE
BAGBRIDGE AGREEMENT, (C) PURSUANT TO AGREEMENTS IN WHICH THE SERVICING AGENT WAS
INVOLVED IN NEGOTIATION OR DRAFTING OF SUCH AGREEMENT OR (D) AS SET FORTH ON
SCHEDULE 4.19,(1) NEITHER SELLER NOR THE COMPANY HAS TAKEN ANY ACTION, THAT HAS
RESULTED, OR MAY RESULT IN (I) THE DISPOSITION OF OR ENCUMBRANCE ON ANY ASSET
ACQUIRED PURSUANT TO THE 2001 PURCHASE AGREEMENT OR (II) THE EXECUTION OR
TERMINATION OF ANY CONTRACT OR ANY AMENDMENT THERETO OR WAIVER OF ANY PROVISION
THEREOF.  THE COMPANY, AND NOT SELLER OR ITS AFFILIATES (OTHER THAN THE
COMPANY), HOLDS THE COMPANY ASSETS.

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(1)             This would be where the “video on demand” rights, scope and the
Warner Bros. agreement would be listed.

 

4.20         BAGBRIDGE AGREEMENT.  SELLERS HAVE PROVIDED BAGBRIDGE LIMITED WITH
COPIES OF ALL LICENSE AGREEMENTS AND EXTRACTS OF EXCLUDED LICENSE AGREEMENTS AND
EXCLUDED PREEXISTING HEI LICENSE AGREEMENTS (EACH AS DEFINED IN THE BAGBRIDGE
AGREEMENT) IN THE POSSESSION OF SELLER OR ITS AFFILIATES.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

5.1           ORGANIZATION AND QUALIFICATION.  BUYER IS DULY ORGANIZED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER ITS JURISDICTION OF FORMATION.

5.2           AUTHORIZATION AND VALIDITY OF AGREEMENT.  BUYER HAS ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO EXECUTE THIS AGREEMENT AND TO CARRY OUT AND
PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT, SUBJECT TO THE TERMS OF THIS
AGREEMENT, AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.  THE
EXECUTION, DELIVERY AND PERFORMANCE BY BUYER OF THIS AGREEMENT, AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, HAVE BEEN DULY AND VALIDLY
AUTHORIZED BY ALL NECESSARY ACTION OF BUYER AND NO OTHER CORPORATE ACTION ON THE
PART OF

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BUYER IS NECESSARY FOR THE AUTHORIZATION, EXECUTION, DELIVERY OR PERFORMANCE BY
BUYER OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY BUYER AND,
ASSUMING THE DUE AUTHORIZATION, EXECUTION AND DELIVERY BY SELLER, CONSTITUTES
THE VALID AND BINDING OBLIGATION OF BUYER ENFORCEABLE AGAINST BUYER 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.

5.3           NO VIOLATION; CONSENTS AND APPROVALS.  (A)  NEITHER THE EXECUTION
AND DELIVERY OF THIS AGREEMENT BY BUYER 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 OR BYLAWS OF BUYER, OR ANY U.S.
FEDERAL, STATE, OR LOCAL COURT OR ADMINISTRATIVE ORDER OR PROCESS, OR ANY
AGREEMENT, CONTRACT, OR OTHER INSTRUMENT, TO WHICH BUYER IS A PARTY OR BY WHICH
BUYER (OR ANY OF ITS RIGHTS, PROPERTIES OR ASSETS) IS SUBJECT OR BOUND OR (II)
VIOLATE OR CONFLICT WITH, ANY U.S. FEDERAL, STATE OR LOCAL LAW, STATUTE OR
REGULATION, EXCEPT IN THE CASE OF (I) AND (II), AS WOULD NOT REASONABLY BE
EXPECTED TO HAVE A BUYER MATERIAL ADVERSE EFFECT.

(B)           EXCEPT FOR THE WAITING PERIOD UNDER THE HART SCOTT RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, ALL CONSENTS, APPROVALS,
AUTHORIZATIONS AND OTHER REQUIREMENTS PRESCRIBED BY ANY LAW, RULE OR REGULATION
WHICH MUST BE OBTAINED OR SATISFIED BY BUYER AND THAT ARE NECESSARY FOR THE
EXECUTION AND DELIVERY BY BUYER OF THIS AGREEMENT AND, SUBJECT TO THE TERMS OF
THIS AGREEMENT, THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT HAVE BEEN OBTAINED AND SATISFIED, OTHER THAN (I) AS REQUIRED UNDER THE
ANTITRUST, TRADE REGULATION OR COMPETITION LAWS OF ANY JURISDICTION OR (II) AS
WOULD NOT REASONABLY BE EXPECTED TO HAVE A BUYER MATERIAL ADVERSE EFFECT OR
WOULD NOT PREVENT THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

5.4           FINANCING COMMITMENT LETTERS.   ATTACHED HERETO AS EXHIBIT D IS
THE COMMITMENT LETTER DELIVERED TO BUYER FOR THE PROPOSED DEBT FINANCING OF THE
TRANSACTIONS CONTEMPLATED HEREBY, WHICH LETTER IS IN FULL FORCE AND EFFECT AND
HAS NOT BEEN AMENDED OR RESCINDED.  BUYER HAS AN EQUITY COMMITMENT FOR THE
FINANCING OF THE TRANSACTIONS CONTEMPLATED HEREBY AS REFLECTED IN THE LETTER
ATTACHED HERETO AS EXHIBIT E, WHICH EQUITY COMMITMENT LETTER IS IN FULL FORCE
AND EFFECT AND HAS NOT BEEN AMENDED OR RESCINDED.

ARTICLE 6

COVENANTS

6.1           ACCESS TO INFORMATION.  (A)  SUBJECT TO THE CONFIDENTIALITY
AGREEMENT, SELLER AND THE COMPANY AGREE TO PROVIDE BUYER AND BUYER’S OFFICERS,
DIRECTORS, EMPLOYEES, ACCOUNTANTS, COUNSEL, FINANCIAL ADVISORS, AGENTS AND OTHER
REPRESENTATIVES, FROM TIME TO TIME PRIOR TO THE CLOSING DATE OR THE TERMINATION
OF THIS AGREEMENT, SUCH INFORMATION AS BUYER SHALL REASONABLY REQUEST WITH
RESPECT TO THE COMPANY AND THE DIRECTORS AND EMPLOYEES OF THE COMPANY AND THE
COMPANY SHALL GIVE REASONABLY PROMPTLY ALL SUCH INFORMATION AND EXPLANATIONS AS
BUYER OR ANY OF BUYER’S OFFICERS, DIRECTORS, EMPLOYEES, ACCOUNTANTS, COUNSEL,
FINANCIAL ADVISORS, AGENTS AND OTHER REPRESENTATIVES MAY REASONABLY REQUEST. 
EXCEPT AS REQUIRED

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BY LAW, BUYER SHALL HOLD, AND SHALL CAUSE BUYER’S AFFILIATES AND OFFICERS,
DIRECTORS, EMPLOYEES, ACCOUNTANTS, COUNSEL, FINANCIAL ADVISORS, AGENTS AND OTHER
REPRESENTATIVES TO HOLD, ANY NON-PUBLIC INFORMATION RECEIVED FROM SELLER OR THE
COMPANY, DIRECTLY OR INDIRECTLY, IN ACCORDANCE WITH THE CONFIDENTIALITY
AGREEMENT.

(B)           SELLER AND THE COMPANY SHALL REASONABLY COOPERATE WITH BUYER WITH
RESPECT TO THE FINANCING BUYER DESIRES TO OBTAIN IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, BUT NOT LIMITED TO, ALLOWING BUYER
ACCESS TO INFORMATION REGARDING THE COMPANY, INCLUDING MATERIAL CONTRACTS.

6.2           INFORMATION.  EACH PARTY HERETO UNDERTAKES TO THE OTHER PARTIES
THAT IT WILL DISCLOSE PROMPTLY IN WRITING TO THE OTHER PARTIES ANY MATTER OR
THING WHICH MAY ARISE OR BECOME KNOWN AFTER THE DATE OF THIS AGREEMENT WHICH IS
INCONSISTENT WITH ANY REPRESENTATIONS OR WARRANTIES SET OUT IN ARTICLES 4 AND 5
AND WHICH MIGHT REASONABLY BE EXPECTED TO RESULT IN A FAILURE OF A CONDITION TO
CLOSING SET OUT IN ARTICLE 7 TO BE SATISFIED OR A CLAIM OR SERIES OF CLAIMS
UNDER THE COVENANTS OF ARTICLE 9. ANY SUCH NOTICE OR UPDATE TO ANY SCHEDULE TO
THIS AGREEMENT SHALL NOT AFFECT THE RIGHTS OF ANY PARTY HEREUNDER.

6.3           OPERATIONS IN THE ORDINARY COURSE OF BUSINESS.  FROM THE DATE
HEREOF THROUGH THE CLOSING DATE, EXCEPT AS OTHERWISE CONTEMPLATED BY THIS
AGREEMENT, THE COMPANY SHALL, AND SELLER SHALL CAUSE THE COMPANY TO, CONDUCT ITS
BUSINESS IN THE USUAL COURSE AND IN SUCH MANNER AS TO ENSURE THAT NO ACT OR
EVENT SHALL OCCUR PRIOR TO THE CLOSING DATE WHICH WOULD REASONABLY BE EXPECTED
TO RESULT IN A BREACH OF THE REPRESENTATIONS AND WARRANTIES SET OUT IN ARTICLE
4.  WITHOUT LIMITING THE FOREGOING, SELLER SHALL PREPARE, OR SHALL CAUSE TO BE
PREPARED, THE FINANCIAL INFORMATION OF THE COMPANY AS NEEDED TO COMPILE THE
ESTIMATED A/R STATEMENT AND DETERMINE THE ESTIMATED ADJUSTED ACCOUNTS RECEIVABLE
AS CONTEMPLATED BY SECTION 3.2(B).

6.4           FORBEARANCE BY SELLER.  FROM THE DATE HEREOF THROUGH THE CLOSING
DATE, EXCEPT AS OTHERWISE CONTEMPLATED BY THIS AGREEMENT, THE COMPANY SHALL NOT,
AND SELLER SHALL CAUSE THE COMPANY NOT TO, WITHOUT THE PRIOR WRITTEN CONSENT OF
BUYER:

(A)           SELL, ASSIGN, LEASE, LICENSE, GRANT, MORTGAGE, PLEDGE, SUBJECT TO
ANY LIEN OR OTHERWISE CONVEY, TRANSFER OR DISPOSE OF ANY OF THE COMPANY ASSETS
OR ENTER INTO ANY AGREEMENT TO DO ANY OF THE FOREGOING;

(B)           ENTER INTO, AMEND, MODIFY, TERMINATE, CANCEL OR EXTEND ANY
MATERIAL CONTRACT (INCLUDING LICENSE AGREEMENTS OR FURTHER CONTRACTS THAT COULD
BE CONSIDERED LICENSE AGREEMENTS);

(C)           WAIVE OR RELEASE ANY RIGHTS, OR CANCEL, COMPROMISE, RELEASE OR
ASSIGN ANY CLAIMS HELD BY SELLER, EXCEPT IN THE ORDINARY COURSE OF BUSINESS;

(D)           INCUR ANY CAPITAL EXPENDITURES;

(E)           CHANGE ANY FINANCIAL ACCOUNTING METHODS, PRINCIPLES OR PRACTICES,
EXCEPT INSOFAR AS MAY BE REQUIRED BY A CHANGE IN GAAP; AND

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(F)            AUTHORIZE OR COMMIT OR AGREE TO DO ANY OF THE THINGS DESCRIBED IN
CLAUSES (A) THROUGH (E).

6.5           OPERATION OF BUSINESS.  FROM THE DATE HEREOF THROUGH THE CLOSING
DATE, THE COMPANY SHALL, AND SELLER SHALL CAUSE THE COMPANY TO, CONDUCT ITS
BUSINESS IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH ALL APPLICABLE LEGAL AND
ADMINISTRATIVE REQUIREMENTS IN ANY JURISDICTION.  WITHOUT LIMITING THE
FOREGOING, THE COMPANY SHALL, AND SELLER SHALL CAUSE THE COMPANY TO, PROMPTLY
PAY ALL AMOUNTS DUE AND OWING IN RESPECT OF (I) PROFIT PARTICIPATIONS RELATED TO
ANY FILM RIGHTS AND THE BAGBRIDGE RIGHTS BASED UPON LICENSES (INCLUDING THE
LICENSES GRANTED PURSUANT TO THE LICENSE AGREEMENTS) OR OTHER CONTRACTUAL
COMMITMENTS AND (II) RESIDUAL COSTS DUE TO CREATIVE ARTISTS OR GUILDS FOR THE
EXPLOITATION OF FILM RIGHTS AND THE BAGBRIDGE RIGHTS BASED UPON LICENSES
(INCLUDING THE LICENSES GRANTED PURSUANT TO THE LICENSE AGREEMENTS) OR OTHER
CONTRACTUAL COMMITMENTS, IN EACH CASE, AS AND WHEN SUCH AMOUNTS BECOME DUE AND
OWING, AS REFLECTED IN INFORMATION, OF THE SAME NATURE AS DESCRIBED IN SECTION
6.12, NECESSARY TO PAY SUCH PROFIT PARTICIPATIONS AND RESIDUALS AND PROVIDED TO
THE COMPANY OR SELLER BY BUYER OR SERVICING AGENT.

6.6           NOTIFICATION OF CLAIMS.  FROM THE DATE HEREOF THROUGH THE CLOSING
DATE, THE COMPANY AND SELLER SHALL, AS PROMPTLY AS PRACTICABLE, NOTIFY BUYER OF
THE COMMENCEMENT OR THREATENED COMMENCEMENT OF ANY MATERIAL LAWSUITS, CLAIMS,
PROCEEDINGS OR INVESTIGATIONS AGAINST SELLER OR THE COMPANY AFFECTING THE
COMPANY OR THE COMPANY ASSETS, OR SEEKING TO ENJOIN THE TRANSACTIONS
CONTEMPLATED HEREIN; AND, BUYER SHALL, AS PROMPTLY AS PRACTICABLE, NOTIFY THE
COMPANY AND SELLER OF THE COMMENCEMENT OR THREATENED COMMENCEMENT OF ANY
MATERIAL LAWSUITS, CLAIMS, PROCEEDINGS OR INVESTIGATIONS AGAINST BUYER AFFECTING
THE COMPANY OR THE COMPANY ASSETS, OR SEEKING TO ENJOIN THE TRANSACTIONS
CONTEMPLATED HEREIN.

6.7           REGULATORY CONSENTS, AUTHORIZATIONS, ETC.  FROM THE DATE HEREOF
THROUGH THE CLOSING DATE, (A)  EACH OF THE PARTIES HERETO SHALL USE ITS
REASONABLE EFFORTS TO TAKE, OR CAUSE TO BE TAKEN, ALL ACTIONS, AND TO DO, OR
CAUSE TO BE DONE, ALL THINGS NECESSARY, PROPER OR ADVISABLE TO (I) PROMPTLY MAKE
ALL REGISTRATIONS AND FILINGS WITH, AND OBTAIN ALL NECESSARY OR ADVISABLE
ACTIONS OR NON-ACTIONS, WAIVERS, CONSENTS AND APPROVALS FROM, ALL GOVERNMENTAL
ENTITIES AND TAKE ALL STEPS AS MAY BE NECESSARY OR ADVISABLE TO OBTAIN AN
APPROVAL OR WAIVER FROM, OR TO AVOID AN ACTION OR PROCEEDING BY, A GOVERNMENTAL
ENTITY; AND (II) DEFEND ANY LEGAL PROCEEDINGS CHALLENGING THIS AGREEMENT OR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING SEEKING TO HAVE
ANY ORDER, STAY OR TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT
INJUNCTION ENTERED BY ANY GOVERNMENTAL ENTITY VACATED OR REVERSED.

(B)           FROM THE DATE HEREOF THROUGH THE CLOSING DATE, EACH PARTY SHALL
KEEP THE OTHER PARTY REASONABLY APPRISED OF THE STATUS OF MATTERS RELATING TO
THE COMPLETION OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING PROMPTLY
FURNISHING THE OTHER PARTY WITH COPIES OF NOTICES OR OTHER COMMUNICATIONS
RECEIVED BY SUCH PARTY OR BY ANY OF ITS AFFILIATES FROM ANY THIRD PARTY AND/OR
ANY GOVERNMENTAL ENTITY WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY SHALL PROMPTLY FURNISH TO THE OTHER PARTY SUCH NECESSARY INFORMATION
AND REASONABLE ASSISTANCE AS THE OTHER PARTY MAY REQUEST IN CONNECTION WITH THE
FOREGOING AND SHALL PROMPTLY PROVIDE COUNSEL FOR THE OTHER PARTY WITH COPIES OF
ALL FILINGS MADE BY SUCH PARTY, AND ALL CORRESPONDENCE BETWEEN SUCH PARTY (AND
ITS ADVISORS) WITH ANY GOVERNMENTAL ENTITY AND ANY OTHER INFORMATION SUPPLIED BY
SUCH PARTY AND ITS AFFILIATES TO A GOVERNMENTAL ENTITY IN

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CONNECTION HEREWITH AND THE TRANSACTIONS CONTEMPLATED HEREBY; PROVIDED, HOWEVER,
THAT EACH PARTY MAY, AS IT DEEMS ADVISABLE AND NECESSARY, REASONABLY DESIGNATE
ANY COMPETITIVELY SENSITIVE MATERIAL PROVIDED TO THE OTHER PARTY AS “OUTSIDE
COUNSEL ONLY,” AND MATERIALS MAY BE REDACTED (I) TO REMOVE REFERENCES CONCERNING
THE VALUATION OF THE COMPANY ASSETS AND (II) AS NECESSARY TO COMPLY WITH
APPLICABLE CONTRACTUAL ARRANGEMENTS.  MATERIALS DESIGNATED AS FOR “OUTSIDE
COUNSEL ONLY” AND THE INFORMATION CONTAINED THEREIN SHALL BE GIVEN ONLY TO THE
OUTSIDE LEGAL COUNSEL OF THE RECEIVING PARTY AND SHALL NOT BE DISCLOSED BY SUCH
OUTSIDE COUNSEL TO EMPLOYEES, OFFICERS OR DIRECTORS OF THE RECEIVING PARTY
UNLESS EXPRESS PERMISSION IS OBTAINED IN ADVANCE FROM THE DISCLOSING PARTY OR
ITS LEGAL COUNSEL.  EACH PARTY SHALL, SUBJECT TO APPLICABLE LAW, PERMIT COUNSEL
FOR THE OTHER PARTY REASONABLE OPPORTUNITY TO REVIEW IN ADVANCE, AND CONSIDER IN
GOOD FAITH THE VIEWS OF SUCH PARTY IN CONNECTION WITH, ANY PROPOSED WRITTEN
COMMUNICATION TO ANY GOVERNMENTAL ENTITY.  EACH PARTY AGREES NOT TO PARTICIPATE,
OR TO PERMIT ITS AFFILIATES TO PARTICIPATE, IN ANY SUBSTANTIVE MEETING OR
DISCUSSION, EITHER IN PERSON OR BY TELEPHONE, WITH ANY GOVERNMENTAL ENTITY IN
CONNECTION HEREWITH AND THE TRANSACTIONS CONTEMPLATED HEREBY UNLESS IT CONSULTS
WITH THE OTHER PARTY IN ADVANCE AND, TO THE EXTENT NOT PROHIBITED BY SUCH
GOVERNMENTAL ENTITY, GIVES THE OTHER PARTY THE OPPORTUNITY TO ATTEND AND
PARTICIPATE.  NONE OF THE PARTIES HERETO SHALL TAKE OR OMIT TO TAKE ANY ACTION
FOR THE PURPOSE OF DELAYING, IMPAIRING OR IMPEDING THE RECEIPT OF ANY REQUIRED
CONSENT, AUTHORIZATION, ORDER OR APPROVAL OR THE MAKING OF ANY REQUIRED FILING
OR REGISTRATION.

6.8           NO INCONSISTENT ACTION.  FROM THE DATE HEREOF THROUGH THE CLOSING
DATE, EACH PARTY HERETO SHALL USE ITS COMMERCIALLY REASONABLE EFFORTS TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND SHALL NOT TAKE
ANY ACTION INCONSISTENT WITH ITS OBLIGATIONS HEREUNDER OR WHICH COULD HINDER OR
DELAY THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

6.9           RIGHT OF ACCESS.  FOLLOWING THE CLOSING, (I) BUYER AGREES TO AND
AGREES TO CAUSE THE COMPANY TO MAKE AVAILABLE TO SELLER FROM TIME TO TIME, AND
UPON SELLER’S REASONABLE REQUEST THEREFOR, ALL AGREEMENTS, ASSIGNMENTS AND OTHER
DOCUMENTS RELATING TO THE COMPANY OR THE COMPANY ASSETS AS SELLER MAY REASONABLY
REQUIRE FOR THE PURPOSE OF RESPONDING TO OR ADDRESSING LEGAL ISSUES THAT ARISE
WITH RESPECT TO THE COMPANY OR THE COMPANY ASSETS AND THAT INVOLVE THE SELLER,
AND FOR ANY OTHER REASON WHICH BUYER REASONABLY BELIEVES WARRANTS ACCESS TO SUCH
AGREEMENTS, ASSIGNMENTS AND OTHER DOCUMENTS, AND (II) SELLERS AGREE TO MAKE
AVAILABLE TO BUYER FROM TIME TO TIME, AND UPON BUYER’S REASONABLE REQUEST
THEREFOR, ALL AGREEMENTS, ASSIGNMENTS AND OTHER DOCUMENTS RELATING TO THE
COMPANY OR THE COMPANY ASSETS STILL IN THE POSSESSION OF SELLERS AS BUYER MAY
REASONABLY REQUIRE FOR THE PURPOSE OF RESPONDING TO OR ADDRESSING LEGAL ISSUES
THAT ARISE WITH RESPECT TO THE COMPANY OR THE COMPANY ASSETS, DETERMINING
WHETHER PAYMENTS UNDER COMPANY LICENSE AGREEMENTS HAVE BEEN INADVERTENTLY MADE
TO SELLER AS CONTEMPLATED BY SECTION 6.14 AND FOR ANY OTHER REASON WHICH SELLER
REASONABLY BELIEVES WARRANTS ACCESS TO SUCH AGREEMENTS, ASSIGNMENTS AND OTHER
DOCUMENTS.

6.10         NO ADDITIONAL REPRESENTATIONS.  BUYER ACKNOWLEDGES THAT IT AND ITS
REPRESENTATIVES HAVE RECEIVED ACCESS TO SUCH BOOKS AND RECORDS, FACILITIES,
EQUIPMENT, CONTRACTS AND OTHER ASSETS OF SELLER WHICH IT AND ITS REPRESENTATIVES
HAVE DESIRED OR REQUESTED TO REVIEW, AND THAT IT AND ITS REPRESENTATIVES HAVE
HAD FULL OPPORTUNITY TO MEET WITH THE MANAGEMENT OF SELLER TO DISCUSS THE
COMPANY OR THE COMPANY ASSETS.  BUYER ACKNOWLEDGES THAT (A) SHOULD THE CLOSING
OCCUR, BUYER SHALL ACQUIRE THE COMPANY AND THE COMPANY ASSETS IN AN “AS IS”
CONDITION

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AND ON A “WHERE IS” BASIS, EXCEPT AS EXPRESSLY REPRESENTED OR WARRANTED IN THIS
AGREEMENT (WHICH INCLUDES THE SCHEDULES HERETO); (B) NEITHER SELLER NOR ANY
OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AS
TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING THE COMPANY OR THE
COMPANY ASSETS FURNISHED OR MADE AVAILABLE TO BUYER AND ITS REPRESENTATIVES
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT (WHICH INCLUDES THE SCHEDULES
HERETO) AND (C) EXCEPT AS CONTEMPLATED HEREBY, NEITHER SELLER NOR ANY OTHER
PERSON SHALL HAVE OR BE SUBJECT TO ANY LIABILITY TO BUYER OR ANY OTHER PERSON
RESULTING FROM SELLER’S MAKING AVAILABLE TO BUYER OR BUYER’S USE OF ANY SUCH
INFORMATION, INCLUDING THE PRESENTATION MATERIALS DELIVERED TO BUYER BY SALEM
PARTNERS, LLC AND DATED JULY, 2006, AS SUBSEQUENTLY UPDATED, SUPPLEMENTED OR
AMENDED (THE “CONFIDENTIAL MEMORANDUM”) OR ANY INFORMATION, DOCUMENTS OR
MATERIAL MADE AVAILABLE TO BUYER IN CERTAIN “DATA ROOMS,” OTHER MANAGEMENT
PRESENTATIONS (FORMAL OR INFORMAL) OR IN ANY OTHER FORM IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY.  WITHOUT LIMITING THE FOREGOING, EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN, SELLER MAKES NO
REPRESENTATION OR WARRANTY TO BUYER WITH RESPECT TO (X) THE INFORMATION SET
FORTH IN THE CONFIDENTIAL MEMORANDUM OR (Y) ANY FINANCIAL PROJECTION OR FORECAST
RELATING TO SELLER, THE COMPANY OR THE COMPANY ASSETS, WHETHER OR NOT INCLUDED
IN THE CONFIDENTIAL MEMORANDUM.

6.11         TAX MATTERS.

(A)           COOPERATION AND EXCHANGE OF INFORMATION.  SELLER AND BUYER SHALL
PROVIDE EACH OTHER WITH SUCH ASSISTANCE AND INFORMATION AS MAY REASONABLY BE
REQUESTED BY EACH OF THEM IN CONNECTION WITH (I) THE PREPARATION OF ANY TAX
RETURNS REQUIRED TO BE FILED (X) BY THE COMPANY AND ITS SUBSIDIARIES (OR WITH
RESPECT TO THE INCOME, PROPERTIES OR OPERATIONS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES) OR (Y) WITH RESPECT TO OWNERSHIP INTERESTS OF THE COMPANY AND (II)
ANY AUDIT OR OTHER EXAMINATION BY ANY TAX AUTHORITY OR ANY JUDICIAL OR
ADMINISTRATIVE PROCEEDINGS RELATING TO SUCH TAX RETURNS.  SELLER, BUYER AND THE
COMPANY AND ANY OF ITS SUBSIDIARIES, AS APPLICABLE, SHALL RETAIN FOR THE FULL
PERIOD OF ANY STATUTE OF LIMITATIONS (INCLUDING ANY EXTENSIONS) ALL TAX RETURNS,
SCHEDULES AND WORK PAPERS, AND ALL MATERIAL RECORDS AND OTHER DOCUMENTS RELATING
TO TAX MATTERS, OF THE COMPANY AND ITS SUBSIDIARIES FOR ALL PRE-CLOSING PERIODS
AND STRADDLE PERIODS, AND SHALL PROVIDE TO EACH OTHER, ANY RECORDS OR
INFORMATION REASONABLY REQUESTED IN CONNECTION WITH THE PREPARATION OF SUCH TAX
RETURNS OR ANY AUDIT, EXAMINATION OR PROCEEDING RELATING TO SUCH TAX RETURNS.

(B)           TAX RETURNS.  (I) SELLER SHALL PREPARE AND FILE (OR CAUSE TO BE
PREPARED AND FILED) IN A TIMELY MANNER ALL TAX RETURNS OF THE COMPANY AND ITS
SUBSIDIARIES (AND WITH RESPECT TO THE INCOME, PROPERTIES OR OPERATIONS OF THE
COMPANY AND ITS SUBSIDIARIES) FOR ANY PRE-CLOSING PERIOD OTHER THAN ALL SUCH TAX
RETURNS THAT ARE DUE AFTER THE CLOSING DATE.  SELLER SHALL PREPARE SUCH TAX
RETURNS, AND EACH ITEM THEREON SHALL BE TREATED, IN A MANNER CONSISTENT WITH
PAST PRACTICES EMPLOYED BY THE COMPANY AND ITS SUBSIDIARIES, AS APPROPRIATE,
UNLESS OTHERWISE REQUIRED BY LAW, AND BUYER SHALL HAVE THE RIGHT TO REVIEW AND
COMMENT ON SUCH TAX RETURNS IN A REASONABLE MANNER; PROVIDED, HOWEVER, THAT FOR
THE AVOIDANCE OF DOUBT THE FOREGOING SHALL NOT APPLY TO ANY TAX RETURNS OF
SELLER’S AFFILIATED GROUP. (II) BUYER SHALL PREPARE AND FILE (OR CAUSE TO BE
PREPARED AND FILED) IN A TIMELY MANNER ALL TAX RETURNS REQUIRED TO BE FILED BY
THE COMPANY AND ANY OF ITS SUBSIDIARIES (AND WITH RESPECT TO THE INCOME,
PROPERTIES OR OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES, OTHER THAN SUCH
INCOME OR OPERATION THAT IS INCLUDABLE IN ANY TAX RETURN OF SELLER OR SELLER’S
AFFILIATED GROUP) FOR ANY PRE-CLOSING PERIOD THAT ARE DUE AFTER THE

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CLOSING DATE AND FOR ANY STRADDLE PERIOD.  THE REST OF THIS SECTION 6.11(B)(II)
SHALL APPLY ONLY IF SELLER IS AT LEAST PARTIALLY LIABLE FOR PAYMENT OF TAXES
SHOWN ON SUCH TAX RETURNS (AND BUYER REQUESTS PAYMENT OF SUCH TAXES FROM SELLER)
UNDER PROVISIONS OF SECTION 6.11(C).  BUYER SHALL PREPARE SUCH TAX RETURNS, AND
EACH ITEM THEREON SHALL BE TREATED, IN A MANNER CONSISTENT WITH PAST PRACTICES
EMPLOYED BY THE COMPANY AND ITS SUBSIDIARIES, AS APPROPRIATE, UNLESS OTHERWISE
REQUIRED BY LAW OR SUCH PAST PRACTICE IS UNREASONABLE.  BUYER SHALL PROVIDE
SELLER WITH A COPY OF SUCH COMPLETED TAX RETURN (AND, IN THE CASE OF ANY TAX
RETURN FOR A STRADDLE PERIOD, A STATEMENT CERTIFYING THE AMOUNT OF TAX SHOWN ON
SUCH TAX RETURN THAT IS ALLOCABLE TO SELLER IN ACCORDANCE WITH SECTION 6.11(G)
HEREOF), TOGETHER WITH APPROPRIATE SUPPORTING INFORMATION AND SCHEDULES, AT
LEAST 20 BUSINESS DAYS PRIOR TO THE DUE DATE (INCLUDING ANY EXTENSION THEREOF)
FOR THE FILING OF SUCH TAX RETURN.  SELLER SHALL HAVE THE RIGHT TO REVIEW AND
COMMENT ON SUCH TAX RETURNS PRIOR TO THE FILING THEREOF.  IN THE CASE OF ANY TAX
RETURN FOR A PRE-CLOSING PERIOD, BUYER SHALL MAKE ANY CHANGES REASONABLY
REQUESTED BY SELLER WITH RESPECT TO ANY SUCH TAX RETURN.  NO TAX RETURN FOR A
PRE-CLOSING PERIOD SHALL BE FILED WITHOUT SELLER’S PRIOR WRITTEN APPROVAL (WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED).  (III)
BUYER SHALL PREPARE AND FILE (OR CAUSE TO BE PREPARED AND FILED) IN A TIMELY
MANNER ALL TAX RETURNS OF THE COMPANY AND ANY OF ITS SUBSIDIARIES (AND WITH
RESPECT TO THE INCOME, PROPERTIES OR OPERATIONS OF THE COMPANY AND ITS
SUBSIDIARIES) FOR ANY POST-CLOSING PERIOD.

(C)           TAX PAYMENTS.  (I) SELLER SHALL PAY (OR CAUSE TO BE PAID) TO THE
RELEVANT TAX AUTHORITY ALL TAXES SHOWN ON TAX RETURNS REQUIRED TO BE FILED BY
SELLER PURSUANT TO SECTION 6.11(B)(I) HEREOF ON OR PRIOR TO THE DUE DATE FOR
PAYMENT THEREOF.  (II) BUYER SHALL PAY (OR CAUSE TO BE PAID) TO THE RELEVANT TAX
AUTHORITY ALL TAXES SHOWN ON TAX RETURNS REQUIRED TO BE FILED BY BUYER PURSUANT
TO SECTION 6.11(B)(II) HEREOF ON OR PRIOR TO THE DUE DATE FOR PAYMENT THEREOF. 
SELLER SHALL REMIT TO BUYER (X) THE AMOUNT OF SUCH TAXES, IN THE CASE OF
PRE-CLOSING PERIODS OR (Y) THE PORTION OF SUCH TAXES THAT IS ALLOCABLE TO THE
PORTION OF THE PERIOD ENDING ON THE CLOSING DATE IN ACCORDANCE WITH SECTION
6.11(G) HEREOF, IN THE CASE OF STRADDLE PERIODS.  PAYMENT OF SUCH AMOUNTS SHALL
BE MADE TO BUYER IN IMMEDIATELY AVAILABLE FUNDS AT LEAST TWO BUSINESS DAYS
BEFORE THE DATE ON WHICH SUCH TAXES ARE DUE.

(D)           TAX INDEMNITY.  SELLER SHALL DEFEND, INDEMNIFY AND HOLD THE
INDEMNIFIED BUYERS AND THE COMPANY AND EACH OF ITS SUBSIDIARIES HARMLESS FROM
AND AGAINST ANY LOSSES WITH RESPECT TO (I) TAXES OF OR WITH RESPECT TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, OR FOR WHICH ANY OF THEM MAY BE LIABLE, FOR
ANY PRE-CLOSING PERIOD (OR PORTION OF A STRADDLE PERIOD ENDING ON THE CLOSING
DATE), (II) TAXES OF OR WHICH ARE THE LIABILITY OF SELLER OR OF ANY OF THE
MEMBERS OF SELLER’S AFFILIATED GROUP (FOR WHICH THE COMPANY OR ANY OF ITS
SUBSIDIARIES MAY BECOME LIABLE UNDER TREASURY REGULATIONS §1.1502-6 OR
OTHERWISE), AND (III) ANY TAXES IMPOSED ON THE COMPANY OR ANY OF ITS
SUBSIDIARIES ARISING AS A RESULT OF A BREACH OR VIOLATION OF THE REPRESENTATIONS
AND WARRANTIES CONTAINED IN SECTION 4.10 (TAXES) AND/OR THE COVENANTS CONTAINED
IN SECTION 6.11 (TAX MATTERS), IN EACH CASE TOGETHER WITH REASONABLE
OUT-OF-POCKET ATTORNEYS’ AND ACCOUNTANTS’ FEES AND, IN EACH CASE, WITHOUT
DUPLICATION OF AMOUNTS PREVIOUSLY PAID BY SELLER PURSUANT TO SECTION 6.11(C)(I)
IN EACH CASE, EXCLUDING LOSSES FOR TAXES RELATING TO SALE AND LEASEBACK
TRANSACTIONS.  INDEMNITY PAYMENTS UNDER THIS SECTION 6.11(D) SHALL BE MADE TO
BUYER IN IMMEDIATELY AVAILABLE FUNDS AT LEAST TWO BUSINESS DAYS BEFORE THE DATE
PAYMENT OF THE TAXES TO WHICH SUCH PAYMENT RELATES IS DUE, OR, IF SUCH TAX HAS
BEEN PAID BY BUYER OR ANY OF ITS AFFILIATES, WITHIN TEN DAYS AFTER WRITTEN
DEMAND IS MADE FOR SUCH PAYMENT, AND SHALL NOT BE SUBJECT TO ANY MINIMUM
THRESHOLD OR MAXIMUM LIMIT.

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(E)           TAX REFUNDS/BENEFITS.  ANY CREDIT WHICH HAS THE RESULT OF REDUCING
THE TAX PAYABLE BY THE COMPANY OR ANY OF ITS SUBSIDIARIES IN ANY POST-CLOSING
PERIOD AND ANY TAX CREDIT OR REFUND (INCLUDING ANY INTEREST WITH RESPECT
THERETO), IN EACH CASE RELATING TO THE COMPANY AND ANY OF ITS SUBSIDIARIES FOR
ANY PRE-CLOSING PERIOD (OR PORTION OF ANY STRADDLE PERIOD ENDING ON THE CLOSING
DATE) AND TO THE EXTENT SELLER IS LIABLE FOR OR HAS MADE PAYMENT OF TAX GIVING
RISE TO SUCH CREDIT PURSUANT TO SECTION 6.11(C) HEREOF, SHALL BE THE PROPERTY OF
SELLER, AND IF RECEIVED BY BUYER, THE COMPANY OR ANY OF THEIR SUBSIDIARIES SHALL
BE PAYABLE PROMPTLY TO SELLER (OTHER THAN ANY CREDIT OR TAX REFUND THAT ARISES
OUT OF THE CARRY BACK OF A LOSS OR CREDIT INCURRED BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES IN THE POST-CLOSING PERIOD).  ANY OTHER TAX REFUND OR CREDIT SHALL
BE THE PROPERTY OF BUYER.

(F)            CONTESTS.  (I) AFTER THE CLOSING, BUYER SHALL PROMPTLY NOTIFY
SELLER IN WRITING OF (X) ANY CORRESPONDENCE FROM ANY TAX AUTHORITY RELATING TO
ANY TAX RETURN FILED BY SELLER PURSUANT TO SECTION 6.11(B)(I) OR BY BUYER
PURSUANT TO SECTION 6.11(B)(II) AND (Y) ANY WRITTEN NOTICE OF A PROPOSED
ASSESSMENT OR CLAIM IN AN AUDIT OR ADMINISTRATIVE OR JUDICIAL PROCEEDING
INVOLVING COMPANY OR ANY OF ITS SUBSIDIARIES (CLAUSES (X) AND (Y) TOGETHER, A
“TAX CONTEST”) WHICH, IF DETERMINED ADVERSELY TO THE TAXPAYER, WOULD BE GROUNDS
FOR INDEMNIFICATION BY SELLER (INCLUDING ANY PAYMENT UNDER SECTION 6.11(C)). 
(II) IN THE CASE OF A TAX CONTEST THAT RELATES TO A PRE-CLOSING PERIOD, SELLER
SHALL HAVE THE RIGHT AT ITS EXPENSE TO CONTROL THE CONDUCT OF SUCH TAX CONTEST;
PROVIDED THAT (X) SELLER SHALL INDEMNIFY THE COMPANY OR ANY OF ITS SUBSIDIARIES
IN RESPECT OF ALL THIRD-PARTY COSTS AND EXPENSES INCURRED BY SUCH COMPANY OR ANY
SUCH SUBSIDIARY AT SELLER’S REQUEST IN CONNECTION WITH SUCH TAX CONTEST, (Y)
SELLER SHALL KEEP BUYER INFORMED OF ALL MATERIAL PROGRESS (AND SHALL SEND BUYER
COPIES OF ALL MATERIAL CORRESPONDENCE RELATING THERETO) OF THE TAX CONTEST AND
(Z) SELLER SHALL NOT ENTER INTO ANY COMPROMISE OR AGREE TO SETTLE ANY CLAIM
PURSUANT TO SUCH TAX CONTEST WITH RESPECT TO ANY ISSUE THAT RECURS FOR ANY
STRADDLE PERIOD OR POST-CLOSING PERIOD OR ANY ITEM RESULTING IN A RECIPROCAL
ADJUSTMENT TO ANY STRADDLE PERIOD OR POST-CLOSING PERIOD WITHOUT THE PRIOR
WRITTEN CONSENT OF BUYER (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED).  BUYER ALSO MAY PARTICIPATE AT ITS OWN EXPENSE IN ANY
SUCH TAX CONTEST AND, IF SELLER DOES NOT NOTIFY BUYER IN WRITING WITHIN 30 DAYS
OF RECEIVING NOTICE OF SUCH TAX CONTEST PURSUANT TO SECTION 6.11(F)(I) HEREOF OF
ITS INTENT TO ASSUME THE DEFENSE OF SUCH TAX CONTEST, BUYER MAY DEFEND THE SAME
IN SUCH MANNER AS IT MAY DEEM APPROPRIATE, INCLUDING, BUT NOT LIMITED TO,
SETTLING SUCH TAX CONTEST AFTER GIVING FIVE DAYS’ PRIOR WRITTEN NOTICE TO SELLER
SETTING FORTH THE TERMS AND CONDITIONS OF SETTLEMENT.  (III) IN THE CASE OF A
TAX CONTEST THAT RELATES TO A STRADDLE PERIOD, (X) EACH OF SELLER AND BUYER MAY
PARTICIPATE IN THE TAX CONTEST, AND (Y) THE TAX CONTEST SHALL BE CONTROLLED BY
THAT PARTY WHICH WOULD BEAR THE BURDEN OF THE GREATER PORTION OF THE ADJUSTMENT
(THE “CONTROLLING PARTY”); PROVIDED THAT (A) THE CONTROLLING PARTY SHALL
INDEMNIFY THE COMPANY OR ANY SUBSIDIARY IN RESPECT OF ALL THIRD-PARTY COSTS AND
EXPENSES INCURRED BY THE COMPANY OR ANY SUCH SUBSIDIARY AT THE CONTROLLING
PARTY’S REQUEST IN CONNECTION WITH SUCH TAX CONTEST, (B) THE CONTROLLING PARTY
SHALL KEEP THE OTHER PARTY INFORMED OF ALL MATERIAL PROGRESS (AND SHALL SEND
SUCH PARTY COPIES OF ALL MATERIAL CORRESPONDENCE RELATING THERETO) OF THE TAX
CONTEST AND (C) IF SELLER IS THE CONTROLLING PARTY, SELLER SHALL NOT ENTER INTO
ANY COMPROMISE OR AGREE TO SETTLE ANY CLAIM PURSUANT TO SUCH TAX CONTEST WITH
RESPECT TO ANY ISSUE THAT RECURS FOR ANY STRADDLE PERIOD OR POST-CLOSING PERIOD
OR ANY ITEM RESULTING IN A RECIPROCAL ADJUSTMENT TO ANY STRADDLE PERIOD OR
POST-CLOSING PERIOD WITHOUT THE PRIOR WRITTEN CONSENT OF BUYER (WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED).  THE PRINCIPLE SET
FORTH IN CLAUSE (Y) OF THE PRECEDING SENTENCE ALSO SHALL GOVERN FOR PURPOSES OF
DECIDING ANY ISSUE THAT MUST BE DECIDED

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JOINTLY (IN PARTICULAR, CHOICE OF JUDICIAL FORUM) IN SITUATIONS IN WHICH
SEPARATE ISSUES ARE OTHERWISE CONTROLLED HEREUNDER BY BUYER AND SELLER.  (IV) IN
THE CASE OF A TAX CONTEST THAT RELATES TO A POST-CLOSING PERIOD, BUYER SHALL
HAVE THE RIGHT AT ITS EXPENSE TO CONTROL THE CONDUCT OF SUCH TAX CONTEST.  (V)
EXCEPT AS PROVIDED IN PARAGRAPH (II) ABOVE, NEITHER BUYER NOR SELLER SHALL ENTER
INTO ANY COMPROMISE OR AGREE TO SETTLE ANY CLAIM PURSUANT TO ANY TAX CONTEST
WHICH WOULD ADVERSELY AFFECT THE OTHER PARTY FOR SUCH YEAR OR A SUBSEQUENT YEAR,
OR WHICH WOULD RESULT IN A PAYMENT UNDER SECTION 6.11(D), WITHOUT THE WRITTEN
CONSENT OF THE OTHER PARTY, WHICH CONSENT MAY NOT BE UNREASONABLY WITHHELD. 
BUYER AND SELLER AGREE TO COOPERATE, AND BUYER AGREES TO CAUSE THE COMPANY AND
ANY OF ITS SUBSIDIARIES TO COOPERATE, IN THE DEFENSE AGAINST OR COMPROMISE OF
ANY CLAIM IN ANY TAX CONTEST.

(G)           ALLOCATION OF TAX FOR STRADDLE PERIODS.  WITH RESPECT TO ANY TAX
THAT IS PAYABLE WITH RESPECT TO A STRADDLE PERIOD, THE PORTION OF ANY SUCH TAX
ALLOCABLE TO THE PORTION OF THE PERIOD ENDING ON THE CLOSING DATE SHALL BE
DEEMED TO EQUAL: (I) IN THE CASE OF TAXES THAT ARE BASED UPON OR RELATED TO
INCOME OR RECEIPTS, THE AMOUNT THAT WOULD BE PAYABLE IF THE TAXABLE YEAR ENDED
WITH THE CLOSING DATE (GIVING EFFECT TO ANY TAX CREDIT OR NET OPERATING LOSS
CARRYOVER AVAILABLE AS OF THE CLOSING DATE), AND (II) IN THE CASE OF ALL OTHER
TAX, THE AMOUNT OF SUCH TAXES FOR THE ENTIRE PERIOD MULTIPLIED BY A FRACTION THE
NUMERATOR OF WHICH IS THE NUMBER OF CALENDAR DAYS IN THE PERIOD ENDING WITH THE
CLOSING DATE AND THE DENOMINATOR OF WHICH IS THE NUMBER OF CALENDAR DAYS IN THE
ENTIRE PERIOD.

(H)           TAX RETURNS OF SELLER’S AFFILIATED GROUP.  NOTWITHSTANDING ANY
OTHER PROVISION OF THIS AGREEMENT, (I) SELLER’S AFFILIATED GROUP SHALL BE
ENTITLED TO CONTROL IN ALL RESPECTS, AND NEITHER BUYER NOR ANY OF ITS AFFILIATES
SHALL BE ENTITLED TO PARTICIPATE IN, ANY TAX CONTEST OR OTHER TAX PROCEEDING
WITH RESPECT TO ANY CONSOLIDATED, COMBINED OR UNITARY TAX RETURN THAT INCLUDES
ANY MEMBER OF SELLER’S AFFILIATED GROUP AND (II) NO MEMBER OF SELLER’S
AFFILIATED GROUP SHALL BE REQUIRED TO PROVIDE ANY PERSON WITH ANY CONSOLIDATED,
COMBINED OR UNITARY TAX RETURN OR COPY THEREOF THAT INCLUDES ANY MEMBER OF
SELLER’S AFFILIATED GROUP (PROVIDED, HOWEVER, THAT TO THE EXTENT THAT SUCH TAX
RETURNS WOULD BE REQUIRED TO BE DELIVERED BUT FOR THIS SECTION 6.11(H), THE
PERSON THAT WOULD BE REQUIRED TO DELIVER SUCH TAX RETURNS SHALL INSTEAD DELIVER
PRO FORMA TAX RETURNS RELATING SOLELY TO THE COMPANY OR ITS RELEVANT
SUBSIDIARY).

(I)            TERMINATION OF ANY TAX SHARING AGREEMENT.  ANY AND ALL TAX
ALLOCATION OR SHARING AGREEMENTS OR OTHER ARRANGEMENTS FOR THE SHARING OF TAXES
BETWEEN THE COMPANY AND/OR ANY OF ITS SUBSIDIARIES, ON THE ONE HAND, AND SELLER
AND/OR ANY MEMBER OF THE SELLER’S AFFILIATED GROUP, ON THE OTHER HAND, SHALL
TERMINATE AS OF, OR PRIOR TO, THE CLOSING DATE AND THE COMPANY, ANY OF ITS
SUBSIDIARIES AND/OR BUYER SHALL HAVE NO OBLIGATION TO PAY TO THE SELLER AND/OR
ANY MEMBER OF THE SELLER’S AFFILIATED GROUP ANY AMOUNT RELATING TO TAXES UNDER
ANY SUCH AGREEMENT OR ARRANGEMENT.

6.12         PARTICIPATIONS AND RESIDUALS.  (A)  BUYER SHALL, OR SHALL CAUSE
SERVICING AGENT TO, PROVIDE SELLER, OR ITS DESIGNEE, WITH ALL SALES DATA, PAYEE
INFORMATION AND OTHER INFORMATION REQUIRED TO ENABLE SELLER TO DISCHARGE THE
PARTICIPATIONS AND RESIDUALS, IN EACH CASE, WITHIN A REASONABLE TIME PERIOD
AFTER RECEIPT BY SERVICING AGENT OF ALL INFORMATION REQUIRED FROM FILM
EXHIBITORS, LICENSEES AND OTHER THIRD PARTIES.  SELLER SHALL DISCHARGE EACH OF
THE PARTICIPATIONS AND RESIDUALS PROMPTLY FOLLOWING RECEIPT FROM BUYER OF ALL
SALES DATA, PAYEE INFORMATION AND OTHER INFORMATION WITH RESPECT TO SUCH
PARTICIPATIONS AND RESIDUALS.  BUYER SHALL PROVIDE

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REASONABLE ACCESS TO BUYER’S AND THE COMPANY’S EMPLOYEES, BOOKS AND RECORDS AND
OTHER RELEVANT INFORMATION REQUIRED TO ENABLE SELLER TO DISCHARGE PROMPTLY WHEN
DUE THE PARTICIPATIONS AND RESIDUALS.  THE INFORMATION PROVIDED BY BUYER SHALL
INCLUDE, BUT NOT BE LIMITED TO (I) THE RELEVANT INFORMATION FOR ALL LICENSE
AGREEMENTS AND OTHER CONTRACTS ENTERED INTO BY BUYER OR THE COMPANY FOLLOWING
THE CLOSING RELATING TO THE FILM RIGHTS, (II) THE REVENUES RECEIVED BY BUYER,
THE COMPANY AND THEIR LICENSES FROM EXPLOITATION OF THE FILM RIGHTS, (III) THE
NUMBER OF EXHIBITIONS OF ANY FILM, (IV) THE MEDIA AND TERRITORIES IN WHICH THE
LICENSED EXPLOITATION HAS TAKEN PLACE, (V) ANY DISCUSSIONS OR AGREEMENTS WITH
ANY CREATIVE ARTIST OR GUILD IN RESPECT OF ANY FILM RIGHTS, AND (VI) ANY OTHER
INFORMATION REQUIRED FOR CALCULATION OF RESIDUALS AND PARTICIPATIONS UNDER
APPLICABLE GUILD AGREEMENTS AND THE FILM AGREEMENTS.  FOR AVOIDANCE OF DOUBT, NO
PARTY HEREUNDER SHALL HAVE ANY OBLIGATIONS UNDER THIS SECTION 6.12 FOR ANY
PARTICIPATIONS AND RESIDUALS THAT BECOME DUE AND PAYABLE AS A RESULT OF EVENTS
OCCURRING AFTER THE TENTH (10TH) ANNIVERSARY OF THE CLOSING.

(B)           IN THE EVENT AND AT THE TIME THAT THE FILMS HEREUNDER ARE SOLD OR
LICENSED BY THE COMPANY OR ITS AGENTS IN TRANSACTIONS INVOLVING OTHER FILMS OR
PROGRAMS (A “FILM PACKAGE”), BUYER SHALL IN GOOD FAITH ENSURE THAT ANY LICENSE
REVENUES ALLOCATED TO ANY FILMS IN A FILM PACKAGE ARE REASONABLY AND FAIRLY
BASED ON THE RELATIVE VALUE OF THE FILMS IN RELATION TO THE OTHER FILMS OR
PROGRAMS IN THE FILM PACKAGE.  BUYER SHALL GIVE SELLER PROMPT WRITTEN NOTICE OF
ANY CLAIM FOR SUCH PARTICIPATION AND RESIDUAL COSTS TO ENABLE SELLER TO DEFEND,
DISPUTE OR MITIGATE SUCH RESIDUAL COSTS AT ITS OPTION AND IN ITS SOLE
DISCRETION.

(C)           BUYER SHALL, EFFECTIVE AS OF THE BUSINESS DAY FOLLOWING THE TENTH
ANNIVERSARY OF THE CLOSING DATE, ENTER INTO THE GUILD ASSUMPTION AGREEMENTS IN A
FORM CONSISTENT WITH INDUSTRY STANDARDS AND SUFFICIENT TO FULLY TERMINATE AND
DISCHARGE SELLER’S OBLIGATIONS AND LIABILITY FOR ANY PARTICIPATIONS AND
RESIDUALS THAT BECOME DUE AND PAYABLE AS A RESULT OF EVENTS OCCURRING AFTER THE
TENTH (10TH) ANNIVERSARY OF THE CLOSING DATE UNDER ANY GUILD ASSUMPTION
AGREEMENTS SELLER HAS ENTERED INTO WITH RESPECT TO ANY EXPLOITATION OF OR
REVENUES RECEIVED FROM THE COMPANY ASSETS.

6.13         ADDITIONAL OBLIGATIONS RELATED TO PARTICIPATIONS AND RECEIVABLES. 
(A)  AFTER THE CLOSING DATE, BUYER SHALL CAUSE THE SERVICING AGENT TO PROVIDE
THE FOLLOWING TO SELLER WITH RESPECT TO PARTICIPATIONS AND RESIDUALS: (I) WITH
RESPECT TO THE PROFIT PARTICIPATIONS REFERRED TO IN CLAUSE (I) OF THE DEFINITION
OF PARTICIPATIONS AND RESIDUALS, (A) A LIST OF FILM TITLES SUBJECT TO
PARTICIPATION RIGHTS, AND (B) WITH RESPECT TO EACH SUCH FILM THE FORMULA OR
FORMULAS FOR CALCULATING THE PROFIT PARTICIPATIONS; AND (II) WITH RESPECT TO THE
RESIDUAL PAYMENT OBLIGATIONS REFERRED TO IN CLAUSE (II) OF THE DEFINITION OF
PARTICIPATIONS AND RESIDUALS, ON A FILM-BY-FILM BASIS, THE FORMULA OR FORMULAS
FOR CALCULATING THE RESIDUAL PAYMENT OBLIGATION TO EACH GUILD IN CONNECTION WITH
THE EXHIBITION OF SUCH FILM.  BUYER SHALL USE COMMERCIALLY REASONABLE EFFORTS TO
CAUSE THE SERVICING AGENT TO PROVIDE THE INFORMATION REFERRED TO IN THIS SECTION
6.13(A) WITHIN 45 DAYS FOLLOWING THE CLOSING DATE.

(B)           IF SELLER DELIVERS A WRITTEN NOTICE TO BUYER AT ANY TIME PRIOR TO
THE DATE ON WHICH BUYER OR AN AFFILIATE EXECUTES A GUILD ASSUMPTION AGREEMENT
THAT SELLER IS THE SUBJECT OF A POTENTIAL TRANSACTION WITH AN UNAFFILIATED THIRD
PARTY INVOLVING A SALE OF ALL OR SUBSTANTIALLY ALL OF THE CAPITAL STOCK OR
ASSETS OF SELLER (A “POTENTIAL CHANGE OF CONTROL”), BUYER SHALL, WITHIN 30 DAYS
OF BUYER’S RECEIPT OF SUCH NOTICE, DELIVER TO SELLER A PROPOSAL FOR THE
TERMINATION OF SELLER’S

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OBLIGATIONS UNDER SECTION 6.12 IN CONNECTION WITH SUCH POTENTIAL CHANGE OF
CONTROL, WHICH PROPOSAL SHALL INCLUDE THE PRICE PAYABLE BY SELLER AS
CONSIDERATION FOR SUCH TERMINATION.  THEREAFTER, BUYER WILL NEGOTIATE IN GOOD
FAITH TO REACH AN AGREEMENT WITH SELLER WITH RESPECT TO SUCH TERMINATION;
PROVIDED THAT BUYER SHALL NOT BE OBLIGATED TO AGREE TO ANY SUCH TERMINATION ON
ANY TERMS UNLESS AND UNTIL A DEFINITIVE AGREEMENT IS REACHED BETWEEN BUYER AND
SELLER WITH RESPECT TO SUCH A TERMINATION.  BUYER AGREES TO KEEP CONFIDENTIAL
INFORMATION REGARDING A POTENTIAL CHANGE OF CONTROL COMMUNICATED TO IT BY
SELLER, SUBJECT TO THE SAME EXCEPTIONS TO CONFIDENTIAL TREATMENT OF “EVALUATION
INFORMATION” SET FORTH IN PARAGRAPHS 1 AND 4 OF THE CONFIDENTIALITY AGREEMENT.

(C)           SERVICE AGENT HAS OR SHALL SUBMIT TO ENTERTAINMENT PARTNERS THE
INFORMATION ATTACHED HERETO AS SCHEDULE 6.13(C), WHICH IS INTENDED TO PROVIDE
THE INFORMATION NECESSARY FOR ENTERTAINMENT PARTNERS TO DETERMINE RESIDUAL
PAYMENTS DUE TO CREATIVE ARTISTS OR GUILDS ON ACCOUNT OF THE EXPLOITATION OF THE
FILM RIGHTS (EXCEPT FOR PAYMENTS DUE IN CONNECTION WITH MUSIC LICENSING
CONTEMPLATED IN SECTION 4.14(A)) AS OF SEPTEMBER 20, 2006.  SELLER AGREES THAT
THIS SECTION 6.13(C) SHALL NOT BE CONSTRUED TO LIMIT SELLER’S OBLIGATION TO
INDEMNIFY BUYER FOR ANY RETAINED LIABILITY IN ACCORDANCE WITH ARTICLE IX.

6.14         PROGRAM LICENSE AGREEMENTS PAYMENTS.  SCHEDULE 6.14 SETS FORTH THE
AMOUNTS DUE AND PAYABLE BY SELLER OR ITS AFFILIATES TO RHI ENTERTAINMENT
DISTRIBUTION, LLC UNDER THE PROGRAM LICENSE AGREEMENTS AS OF SEPTEMBER 30,
2006.  SELLER AND BUYER AGREE TO COOPERATE IN GOOD FAITH TO AMEND SCHEDULE 6.14
PRIOR TO THE CLOSING DATE TO ADD SUCH ADDITIONAL AMOUNTS THAT BECOME DUE AND
PAYABLE UNDER THE PROGRAM LICENSE AGREEMENTS DURING THE PERIOD FROM SEPTEMBER
30, 2006 THROUGH THE CLOSING DATE, IT BEING UNDERSTOOD THAT ANY GOOD FAITH
DISPUTES AS TO SUCH AMOUNTS SHALL BE RESOLVED AFTER THE CLOSING DATE IN
ACCORDANCE WITH THE TERMS OF THE PROGRAM LICENSE AGREEMENTS.

ARTICLE 7

CONDITIONS TO CLOSING

7.1           CONDITIONS OF EACH PARTY’S OBLIGATION TO CLOSE.  THE OBLIGATION OF
THE PARTIES HERETO TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
SUBJECT TO THE FULFILLMENT, AT OR BEFORE THE CLOSING, OF THE CONDITIONS SET
FORTH BELOW IN THIS SECTION 7.1.  THE PARTIES HERETO MAY MUTUALLY AGREE TO WAIVE
ANY OR ALL OF THESE CONDITIONS.

(A)           ALL CONSENTS, AUTHORIZATIONS, ORDERS AND APPROVALS OF, AND FILINGS
AND REGISTRATIONS WITH, ANY GOVERNMENTAL ENTITY THAT ARE REQUIRED IN CONNECTION
WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE CONSUMMATION BY EACH
PARTY HERETO OF THE TRANSACTIONS CONTEMPLATED ON ITS PART HEREBY, SHALL HAVE
BEEN OBTAINED OR MADE, AND THE WAITING PERIOD PURSUANT TO THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, SHALL HAVE EXPIRED OR BEEN
TERMINATED.

(B)           AS OF THE CLOSING DATE, THERE SHALL BE NO STATUTE, REGULATION,
INJUNCTION, RESTRAINING ORDER OR DECREE OF ANY NATURE OF ANY COURT OR
GOVERNMENTAL AGENCY OR BODY OF COMPETENT JURISDICTION THAT IS IN EFFECT THAT
RESTRAINS OR PROHIBITS THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

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(C)           JP MORGAN CHASE BANK SHALL HAVE CONSENTED TO THE TRANSACTIONS
CONTEMPLATED HEREIN AS REQUIRED BY THAT CERTAIN CREDIT, SECURITY AND PLEDGE
AGREEMENT, DATED AS OF DECEMBER 31, 2001, AS AMENDED, BY AND AMONG CROWN MEDIA
HOLDINGS, INC., ITS SUBSIDIARIES NAMED THEREIN, THE LENDERS NAMED THEREIN AND
THE CHASE MANHATTAN BANK (NOW KNOWN AS JPMORGAN CHASE BANK, AS ADMINISTRATIVE
AGENT AND ISSUING BANK).

7.2           CONDITIONS TO BUYER’S OBLIGATION TO CLOSE.  THE OBLIGATION OF
BUYER TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE SUBJECT TO THE
FULFILLMENT, AT OR BEFORE THE CLOSING, OF ALL OF THE CONDITIONS SET FORTH BELOW
IN THIS SECTION 7.2.  BUYER MAY WAIVE IN WRITING ANY OR ALL OF THESE CONDITIONS
IN WHOLE OR IN PART WITHOUT PRIOR NOTICE.

(A)           THE REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY
CONTAINED OR INCORPORATED HEREIN SHALL BE TRUE AND CORRECT ON AND AS OF THE
CLOSING DATE WITH THE SAME EFFECT AS IF SUCH REPRESENTATIONS AND WARRANTIES HAD
BEEN MADE ON AND AS OF THE CLOSING DATE (EXCEPT FOR REPRESENTATIONS AND
WARRANTIES WHICH ARE AS OF A PARTICULAR DATE, WHICH SHALL BE TRUE AND CORRECT AS
OF SUCH DATE), EXCEPT, IN THE CASE OF ANY SUCH REPRESENTATION OR WARRANTY THAT
IS NOT QUALIFIED BY “MATERIAL,” “MATERIAL ADVERSE EFFECT” OR SIMILAR LANGUAGE,
AS WOULD NOT BE MATERIAL, AND SELLER AND THE COMPANY SHALL HAVE PERFORMED IN ALL
MATERIAL RESPECTS THEIR RESPECTIVE OBLIGATIONS AND COMPLIED IN ALL MATERIAL
RESPECTS WITH THEIR RESPECTIVE AGREEMENTS AND COVENANTS REQUIRED BY THIS
AGREEMENT TO BE PERFORMED OR COMPLIED WITH ON THEIR PART ON OR PRIOR TO THE
CLOSING DATE AND NO EVENT AS DESCRIBED IN SECTION 10.2(D)(III) SHALL HAVE
OCCURRED.

(B)           BUYER SHALL HAVE RECEIVED FROM SELLER AND THE COMPANY A
CERTIFICATE DATED AS OF THE CLOSING DATE AND SIGNED BY AN AUTHORIZED OFFICER OF
SELLER AND THE COMPANY CERTIFYING ITS COMPLIANCE WITH THE CONDITIONS SET FORTH
IN SECTION 7.2(A).

(C)           [RESERVED]

(D)           BUYER SHALL RECEIVE AT THE CLOSING THE DELIVERIES REQUIRED BY
SECTION 8.2.

(E)           AS OF THE CLOSING DATE, NEITHER SELLER NOR THE COMPANY SHALL BE
THE SUBJECT OF A BANKRUPTCY CASE; NO COURT OF COMPETENT JURISDICTION SHALL HAVE
ENTERED AN ORDER, JUDGMENT OR DECREE APPOINTING A RECEIVER, TRUSTEE, LIQUIDATOR
OR CONSERVATOR OF SELLER OR THE COMPANY OR OF THE WHOLE OR ANY SUBSTANTIAL PART
OF ITS PROPERTIES, OR APPROVED A PETITION FILED AGAINST SELLER OR THE COMPANY
SEEKING REORGANIZATION OR SIMILAR RELIEF UNDER THE FEDERAL BANKRUPTCY LAWS OR
ANY OTHER APPLICABLE LAW OR STATUTE OF THE UNITED STATES OF AMERICA OR ANY STATE
OR FOREIGN STATE WHICH SHALL NOT HAVE BEEN DISMISSED; NO COURT OF COMPETENT
JURISDICTION SHALL HAVE ASSUMED CUSTODY OR CONTROL OF SELLER OR THE COMPANY OR
OF THE WHOLE OR ANY SUBSTANTIAL PART OF THEIR RESPECTIVE PROPERTIES UNDER THE
PROVISIONS OF ANY OTHER LAW FOR THE RELIEF OF THE DEBTS OF SELLER OR THE
COMPANY; THERE SHALL NOT BE PENDING AGAINST SELLER OR THE COMPANY ANY PROCEEDING
SEEKING ANY OF THE FOREGOING RELIEF NOR SHALL A PETITION IN BANKRUPTCY HAVE BEEN
PENDING AGAINST SELLER OR THE COMPANY AND NOT BEEN DISMISSED PRIOR TO THE
CLOSING DATE; NOR SHALL SELLER OR THE COMPANY BY ANY ACT HAVE INDICATED ITS
CONSENT TO, APPROVAL OF, OR ACQUIESCENCE IN, ANY SUCH PROCEEDING OR PETITION;
NOR SHALL SELLER OR THE COMPANY HAVE ADMITTED IN WRITING ITS INABILITY TO PAY
ITS DEBTS GENERALLY AS THEY BECOME DUE, FILED A PETITION IN BANKRUPTCY OR A
PETITION TO TAKE ADVANTAGE OF ANY INSOLVENCY ACT OR MADE AN ASSIGNMENT FOR THE
BENEFIT OF ITS CREDITORS OR COMMENCED A PROCEEDING FOR THE APPOINTMENT OF A
RECEIVER, TRUSTEE,

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LIQUIDATOR, CONSERVATOR OF ITSELF OR OF A WHOLE OR ANY SUBSTANTIAL PART OF ITS
PROPERTY OR FILED A PETITION OR ANSWER SEEKING REORGANIZATION OR ARRANGEMENT OR
SIMILAR RELIEF UNDER THE FEDERAL BANKRUPTCY LAWS OR ANY OTHER APPLICABLE LAW OR
STATUE OF THE UNITED STATES OF AMERICA OR ANY STATE OR FOREIGN STATE.

(F)            BUYER SHALL HAVE RECEIVED FROM SELLER A COPY OF THE RESOLUTIONS
OF THE BOARD OF DIRECTORS, MEMBERS, OR SIMILAR BODY OF SELLER AND THE COMPANY
HAVING THE AUTHORITY TO APPROVE THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT AUTHORIZING THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE
CONSUMMATION OF THE TRANSACTIONS SET FORTH HEREIN.  SAID RESOLUTIONS SHALL BE
CERTIFIED BY AN AUTHORIZED OFFICER OF SELLER AS BEING TRUE AND CORRECT AND IN
FULL FORCE AND EFFECT AS OF THE CLOSING DATE.

(G)           RHI ENTERTAINMENT DISTRIBUTION, LLC SHALL HAVE RECEIVED THE AMOUNT
IN CASH SET FORTH ON SCHEDULE 6.14, AS AMENDED PURSUANT TO SECTION 6.14.

(H)           BUYER SHALL HAVE RECEIVED FROM SELLER OR THE COMPANY EVIDENCE
REASONABLY SATISFACTORY TO BUYER THAT ALL VIDEO-ON-DEMAND AGREEMENTS HAVE BEEN
TERMINATED AS TO THE FILMS.

(I)            BUYER SHALL HAVE RECEIVED FROM SELLER A LICENSE FROM HALLMARK
CARDS, INCORPORATED TO ALLOW THE COMPANY TO CONTINUE TO USE THE HALLMARK NAME AS
PART OF THE NAME “HALLMARK ENTERTAINMENT” AS IT APPEARS ON SCREEN, AND IN ANY
PACKAGING, ADVERTISING OR PUBLICITY MATERIAL PRODUCED PRIOR TO THE CLOSING DATE,
IN EACH CASE, FOR ANY OF THE FILMS.

(J)            SELLER SHALL HAVE DELIVERED TO BUYER A CERTIFICATION OF
NON-FOREIGN STATUS IN A FORM AND MANNER THAT COMPLIES WITH THE REQUIREMENTS OF
TREASURY REGULATION SECTION 1.1445-2(B)(2).

7.3           CONDITIONS TO SELLER’S OBLIGATION TO CLOSE.  THE OBLIGATION OF
SELLER AND THE COMPANY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY SHALL
BE SUBJECT TO THE FULFILLMENT, AT OR BEFORE THE CLOSING, OF ALL OF THE
CONDITIONS SET FORTH BELOW IN THIS SECTION 7.3.  SELLER MAY WAIVE IN WRITING ANY
OR ALL OF THESE CONDITIONS IN WHOLE OR IN PART WITHOUT PRIOR NOTICE.

(A)           BUYER SHALL HAVE PERFORMED IN ALL MATERIAL RESPECTS ITS MATERIAL
OBLIGATIONS AND COMPLIED IN ALL MATERIAL RESPECTS WITH ITS MATERIAL AGREEMENTS
AND COVENANTS REQUIRED BY THIS AGREEMENT TO BE PERFORMED OR COMPLIED WITH ON ITS
PART ON OR PRIOR TO THE CLOSING DATE.

(B)           SELLER AND THE COMPANY SHALL HAVE RECEIVED FROM BUYER A
CERTIFICATE DATED AS OF THE CLOSING DATE AND SIGNED BY AN AUTHORIZED OFFICER OF
BUYER CERTIFYING BUYER’S COMPLIANCE WITH THE CONDITIONS SET FORTH IN SECTION
7.3(A).

(C)           AS OF THE CLOSING DATE, BUYER SHALL NOT BE THE SUBJECT OF A
BANKRUPTCY CASE; NO COURT OF COMPETENT JURISDICTION SHALL HAVE ENTERED AN ORDER,
JUDGMENT OR DECREE APPOINTING A RECEIVER, TRUSTEE, LIQUIDATOR OR CONSERVATOR OF
BUYER OR OF THE WHOLE OR ANY SUBSTANTIAL PART OF ITS PROPERTIES, OR APPROVED A
PETITION FILED AGAINST BUYER SEEKING REORGANIZATION OR SIMILAR RELIEF UNDER THE
FEDERAL BANKRUPTCY LAWS OR ANY OTHER APPLICABLE LAW OR STATUTE OF THE UNITED
STATES OF AMERICA OR ANY STATE OR FOREIGN STATE WHICH SHALL NOT HAVE BEEN

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DISMISSED; NO COURT OF COMPETENT JURISDICTION SHALL HAVE ASSUMED CUSTODY OR
CONTROL OF BUYER OR OF THE WHOLE OR ANY SUBSTANTIAL PART OF ITS PROPERTIES UNDER
THE PROVISIONS OF ANY OTHER LAW FOR THE RELIEF OF BUYER’S DEBTS; THERE SHALL NOT
BE PENDING AGAINST BUYER ANY PROCEEDING SEEKING ANY OF THE FOREGOING RELIEF NOR
SHALL A PETITION IN BANKRUPTCY HAVE BEEN PENDING AGAINST BUYER AND NOT BEEN
DISMISSED PRIOR TO THE CLOSING DATE; NOR SHALL BUYER BY ANY ACT HAVE INDICATED
ITS CONSENT TO, APPROVAL OF, OR ACQUIESCENCE IN, ANY SUCH PROCEEDING OR
PETITION; NOR SHALL BUYER HAVE ADMITTED IN WRITING ITS INABILITY TO PAY ITS
DEBTS GENERALLY AS THEY BECOME DUE, FILED A PETITION IN BANKRUPTCY OR A PETITION
TO TAKE ADVANTAGE OF ANY INSOLVENCY ACT OR MADE AN ASSIGNMENT FOR THE BENEFIT OF
ITS CREDITORS OR COMMENCED A PROCEEDING FOR THE APPOINTMENT OF A RECEIVER,
TRUSTEE, LIQUIDATOR, CONSERVATOR OF ITSELF OR OF A WHOLE OR ANY SUBSTANTIAL PART
OF ITS PROPERTY OR FILED A PETITION OR ANSWER SEEKING REORGANIZATION OR
ARRANGEMENT OR SIMILAR RELIEF UNDER THE FEDERAL BANKRUPTCY LAWS OR ANY OTHER
APPLICABLE LAW OR STATUE OF THE UNITED STATES OF AMERICA OR ANY STATE OR FOREIGN
STATE.

(D)           SELLER AND THE COMPANY SHALL HAVE RECEIVED FROM BUYER A COPY OF
THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF BUYER (AND ANY COMMITTEE THEREOF)
AUTHORIZING THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE CONSUMMATION OF
THE TRANSACTIONS SET FORTH HEREIN.  SAID RESOLUTIONS SHALL BE CERTIFIED BY AN
AUTHORIZED OFFICER OF BUYER AS BEING TRUE AND CORRECT AND IN FULL FORCE AND
EFFECT AS OF THE CLOSING DATE.

(E)           SELLER SHALL RECEIVE AT THE CLOSING THE DELIVERIES REQUIRED BY
SECTION 8.3.

(F)            SELLER SHALL HAVE RECEIVED A REASONABLY SATISFACTORY WRITTEN
OPINION OF AN INVESTMENT BANK OF NATIONAL REPUTE TO THE EFFECT THAT, FROM A
FINANCIAL POINT OF VIEW AND SUBJECT TO CERTAIN ASSUMPTIONS AND LIMITATIONS, THE
CONSIDERATION TO BE RECEIVED BY SELLER PURSUANT TO THIS AGREEMENT IS FAIR.

ARTICLE 8

THE CLOSING

8.1           TIME AND LOCATION OF CLOSING.  SUBJECT TO THE FULFILLMENT OF ALL
OF THE CONDITIONS SPECIFIED IN ARTICLE 7 (ANY OR ALL OF WHICH MAY BE WAIVED IN
WRITING BY THE RESPECTIVE PARTY WHOSE PERFORMANCE IS CONDITIONED UPON THE
SATISFACTION OF SUCH CONDITIONS), THE PURCHASE AND SALE OF THE COMPANY AND THE
OTHER TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE CONSUMMATED AT A
CLOSING (THE “CLOSING”) TO BE HELD AT THE OFFICES OF LATHAM & WATKINS LLP, 885
THIRD AVENUE, NEW YORK, NEW YORK 10022 AT 10:00 A.M., LOCAL TIME, ON THE DATE
FALLING SEVEN DAYS FOLLOWING THE DATE WHEN ALL OF THE CONDITIONS SPECIFIED IN
ARTICLE 7 SHALL HAVE BEEN FULFILLED OR WAIVED OR ON SUCH OTHER DATE AS THE
PARTIES SHALL MUTUALLY AGREE (THE “CLOSING DATE”).

8.2           ACTIONS BY SELLER AT CLOSING.  AT THE CLOSING, SELLER AND THE
COMPANY SHALL DELIVER TO BUYER THE FOLLOWING:

(A)           THE ASSIGNMENT AND ASSUMPTION AGREEMENT, DULY EXECUTED BY SELLER.

(B)           AN ASSIGNMENT FROM SELLER TO THE COMPANY OF ALL COMPANY ASSETS
HELD BY SELLER.

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(C)           THE  RETAINED LIABILITIES ASSUMPTION AGREEMENT, DULY EXECUTED BY
SELLER.

(D)           ALL ORIGINAL COPYRIGHT REGISTRATION CERTIFICATES AND TRADEMARK
REGISTRATION CERTIFICATES, OR, IF NOT AVAILABLE, TRUE AND CORRECT COPIES
THEREOF; AND BUYER SHALL BE ENTITLED TO ANY AND ALL OTHER AGREEMENTS,
ASSIGNMENTS AND OTHER MATERIAL DOCUMENTS RELATING TO THE COMPANY ACQUIRED BY
BUYER HEREUNDER WHICH ARE IN SELLER’S POSSESSION.

(E)           CERTIFIED COPIES OF MINUTES OR UNANIMOUS WRITTEN CONSENTS OF THE
BOARD OF DIRECTORS AND STOCKHOLDERS OR MEMBERS, IF NECESSARY, OF SELLER AND THE
COMPANY APPROVING THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

(F)            THE CERTIFICATE DESCRIBED IN SECTION 7.2(B).

(G)           EVIDENCE SATISFACTORY TO BUYER IN ITS SOLE DISCRETION TO THE
EFFECT THAT ALL LIENS ON THE COMPANY’S ASSETS OTHER THAN PERMITTED LIENS (BUT
INCLUDING, WITHOUT LIMITATION, LIENS GRANTED IN CONNECTION WITH THAT CERTAIN
CREDIT, SECURITY AND PLEDGE AGREEMENT, DATED AS OF DECEMBER 31, 2001, AS
AMENDED, BY AND AMONG CROWN MEDIA HOLDINGS, INC., ITS SUBSIDIARIES NAMED
THEREIN, THE LENDERS NAMED THEREIN AND THE CHASE MANHATTAN BANK (NOW KNOWN AS
JPMORGAN CHASE BANK) AS ADMINISTRATIVE AGENT AND ISSUING BANK) HAVE BEEN FULLY
RELEASED AND DISCHARGED.

(H)           THE HMCER LICENSE, DULY EXECUTED BY SELLER.

(I)            EVIDENCE REASONABLY SATISFACTORY TO BUYER THAT SELLER OR THE
COMPANY HAS PAID THE AMOUNTS SET FORTH ON ANY STATEMENT PROVIDED BY
ENTERTAINMENT PARTNERS OF AMOUNTS DUE IN RESPECT OF RESIDUAL PAYMENTS DUE TO
CREATIVE ARTISTS OR GUILDS ON ACCOUNT OF THE EXPLOITATION OF THE FILM RIGHTS AND
AS RELATES TO THE BAGBRIDGE RIGHTS (EXCEPT FOR PAYMENTS DUE IN CONNECTION WITH
MUSIC LICENSING CONTEMPLATED IN SECTION 4.14(A)) BASED ON THE INFORMATION
PROVIDED TO ENTERTAINMENT PARTNERS BY SERVICING AGENT PURSUANT TO SECTION
6.13(C).

(J)            EVIDENCE TO THE EFFECT THAT THE COMPANY HAS (I) TERMINATED ANY
AND ALL RIGHTS RELATING TO THE EXPLOITATION OF THE RELEVANT FILMS GRANTED TO
WARNER BROS. PURSUANT TO THE WARNER BROS. LICENSE AGREEMENT AND (II) CAUSED
WARNER BROS. TO TERMINATE ANY AND ALL RIGHTS RELATING TO THE EXPLOITATION OF THE
RELEVANT FILMS GRANTED BY WARNER BROS. TO THIRD PARTIES PURSUANT TO OR OTHERWISE
IN CONNECTION WITH THE WARNER BROS. LICENSE AGREEMENT.

8.3           ACTIONS BY BUYER AT CLOSING.  AT THE CLOSING, BUYER SHALL DELIVER
TO SELLER THE FOLLOWING:

(A)           THE CASH CONSIDERATION IN THE MANNER SET FORTH IN SECTION 3.1(A).

(B)           CERTIFIED COPIES OF MINUTES OR UNANIMOUS WRITTEN CONSENTS OF THE
BOARD OF DIRECTORS AND STOCKHOLDERS OR MEMBERS, IF NECESSARY, OF BUYER APPROVING
THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED HEREBY.

(C)           ASSIGNMENT AND ASSUMPTION AGREEMENT, DULY EXECUTED BY BUYER.

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(D)           THE CERTIFICATE DESCRIBED IN SECTION 7.3(B).

(E)           THE HMCER LICENSE, DULY EXECUTED BY BUYER.

ARTICLE 9

INDEMNIFICATION

9.1           INDEMNIFICATION BY SELLER.  SELLER SHALL DEFEND, INDEMNIFY AND
HOLD BUYER AND ITS OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, MEMBERS,
EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS, LICENSEES, AFFILIATES AND ASSIGNS
(THE “INDEMNIFIED BUYERS”) HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, ACTIONS OR CAUSES OF ACTION, ASSESSMENTS, JUDGMENTS, AWARDS, FINES,
SANCTIONS, CHARGES, DAMAGES, LIABILITIES, LOSSES, COSTS, INTEREST, PENALTIES,
TAX AND AMOUNTS PAID IN SETTLEMENT AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE COSTS, FEES AND EXPENSES OF ATTORNEYS, EXPERTS, ACCOUNTANTS,
APPRAISERS, CONSULTANTS, WITNESSES, INVESTIGATORS AND ANY OTHER AGENTS OR
REPRESENTATIVES OF BUYER) (“LOSSES”) WHICH MAY BE INCURRED OR SUFFERED BY THE
INDEMNIFIED BUYERS OR ANY OF THEM, ARISING OUT OF OR RELATING TO (A) ANY BREACH
OF ANY REPRESENTATION OR WARRANTY MADE BY SELLER OR THE COMPANY IN THIS
AGREEMENT; (B) ANY FAILURE ON THE PART OF SELLER TO PERFORM ANY COVENANT OR
AGREEMENT IN THIS AGREEMENT, OR ON THE PART OF THE COMPANY WITH RESPECT TO
COVENANTS REQUIRED TO BE PERFORMED PRIOR TO THE CLOSING; OR (C) ANY RETAINED
LIABILITIES (EACH, A “SELLER’S INDEMNIFICATION CLAIM”).  SAVE IN THE CASE OF
FRAUD, INCLUDING, WITHOUT LIMITATION, FRAUDULENT CONCEALMENT BY SELLER, IN NO
EVENT SHALL SELLER HAVE ANY LIABILITY WITH RESPECT TO ANY INDEMNIFICATION
PURSUANT TO SECTION 9.1(A) (EXCEPT IN THE CASE OF ANY BREACH OF SECTION 4.3 (NO
UNDISCLOSED LIABILITIES), SECTION 4.10 (TAXES) OR SECTION 4.19 (OWNERSHIP BY THE
COMPANY; NO INCONSISTENT ACTIONS)) UNTIL THE TOTAL DOLLAR AMOUNT OF ALL SUCH
INDEMNIFICATION OBLIGATIONS THAT WOULD OTHERWISE BE IDENTIFIABLE PURSUANT TO
SUCH SECTION 9.1(A) (OTHER THAN LOSSES ARISING FROM BREACHES OF THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 4.3 (NO UNDISCLOSED
LIABILITIES), SECTION 4.10 (TAXES) OR SECTION 4.19 (OWNERSHIP BY THE COMPANY; NO
INCONSISTENT ACTIONS)), SHALL EXCEED $1,600,000, IN WHICH EVENT SELLER WILL BE
LIABLE ONLY FOR THE AMOUNT IN EXCESS OF $1,600,000; PROVIDED THAT (SAVE IN THE
CASE OF FRAUD, INCLUDING, WITHOUT LIMITATION, FRAUDULENT CONCEALMENT BY SELLER)
IN NO EVENT SHALL SELLER’S AGGREGATE LIABILITY IN RESPECT OF SECTION 9.1(A)
(EXCEPT IN THE CASE OF ANY BREACH OF SECTION 4.3 (NO UNDISCLOSED LIABILITIES),
SECTION 4.10 (TAXES) OR SECTION 4.19 (OWNERSHIP BY THE COMPANY; NO INCONSISTENT
ACTIONS)) EXCEED $25,000,000, PROVIDED THAT THE FOREGOING LIMITS ON THE SELLER’S
LIABILITY SHALL NOT APPLY WITH RESPECT TO LOSSES ARISING FROM BREACHES OF THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 4.3 (NO UNDISCLOSED
LIABILITIES), SECTION 4.10 (TAXES) OR SECTION 4.19 (OWNERSHIP BY THE COMPANY; NO
INCONSISTENT ACTIONS).

9.2           INDEMNIFICATION BY BUYER.  BUYER SHALL DEFEND, INDEMNIFY AND HOLD
SELLER AND ITS OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, MEMBERS, EMPLOYEES,
REPRESENTATIVES, AGENTS, ATTORNEYS, LICENSEES, AFFILIATES AND ASSIGNS (THE
“INDEMNIFIED SELLER PARTIES”) HARMLESS FROM AND AGAINST ANY AND ALL LOSSES WHICH
MAY BE SUSTAINED, INCURRED OR SUFFERED BY THE INDEMNIFIED SELLER PARTIES AS A
RESULT OF, ARISING OUT OF OR RELATING TO (A) ANY BREACH OF ANY REPRESENTATION OR
WARRANTY MADE BY BUYER IN THIS AGREEMENT, AND (B) ANY FAILURE ON THE PART OF
BUYER TO PERFORM ANY COVENANT OR AGREEMENT IN THIS AGREEMENT.  SAVE IN THE CASE
OF FRAUD, INCLUDING, WITHOUT LIMITATION, FRAUDULENT CONCEALMENT BY BUYER, IN NO
EVENT SHALL BUYER HAVE ANY LIABILITY WITH RESPECT TO ANY INDEMNIFICATION
PURSUANT TO SECTION 9.2(A) IN AN AMOUNT EXCEEDING $25,000,000.

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9.3           DEFENSE OF CLAIMS.

(A)           IF ANY CLAIM IS BROUGHT AGAINST ANY OF THE INDEMNIFIED PARTIES BY
A THIRD PARTY, AND IF SUCH INDEMNIFIED PARTY INTENDS TO SEEK INDEMNITY WITH
RESPECT THERETO UNDER THIS ARTICLE 9, SUCH INDEMNIFIED PARTY SHALL PROMPTLY
NOTIFY IN WRITING BUYER OR SELLER, AS THE CASE MAY BE, OF SUCH CLAIM.  IF ANY
INDEMNIFIED PARTY FAILS TO PROVIDE THE FOREGOING WRITTEN NOTICE IN A TIMELY
MANNER, WHICH FAILURE TO NOTIFY RESULTS IN OR OTHERWISE GIVES RISE TO ANY
MATERIAL PREJUDICE TO THE DEFENSE OF SUCH CLAIM, THE INDEMNIFIED PARTY OR
PARTIES SHALL BE DEEMED TO HAVE WAIVED ITS OR THEIR RIGHTS TO INDEMNIFICATION
UNDER THIS ARTICLE 9 FROM THE INDEMNIFYING PARTY OR PARTIES ONLY TO THE EXTENT
OF THE PREJUDICE SUFFERED AS A RESULT OF FAILURE TO TIMELY NOTIFY.

(B)           UPON RECEIPT OF SUCH NOTICE, THE INDEMNIFYING PARTY SHALL HAVE 30
DAYS TO COMMENCE TO UNDERTAKE, CONDUCT AND CONTROL, THROUGH COUNSEL OF ITS OWN
CHOOSING AND ITS SOLE COST AND EXPENSE, THE SETTLEMENT OR DEFENSE THEREOF, AND
THE INDEMNIFIED PARTY SHALL COOPERATE IN CONNECTION THEREWITH (INCLUDING,
WITHOUT LIMITATION, PROVIDING TO THE INDEMNIFYING PARTY, AT THE INDEMNIFYING
PARTY’S REQUEST, AND AT NO COST, ANY INFORMATION AND REASONABLE ASSISTANCE FROM
THE INDEMNIFIED PARTY’S STAFF WHICH MAY BE NECESSARY FOR SUCH SETTLEMENT OR
DEFENSE); PROVIDED THAT:

(I)            WITHOUT THE INDEMNIFIED PARTY’S CONSENT, THE INDEMNIFYING PARTY
SHALL NOT CONSENT TO THE ENTRY OF ANY JUDGMENT OR ENTER INTO ANY SETTLEMENT THAT
PROVIDES FOR THE IMPOSITION OF ANY LIEN ON ANY ASSETS OF THE COMPANY OR OTHER
ASSETS OF THE INDEMNIFIED PARTY, OR ANY INJUNCTIVE OR EQUITABLE RELIEF AFFECTING
THE INDEMNIFIED PARTY;

(II)           THE INDEMNIFYING PARTY SHALL PERMIT THE INDEMNIFIED PARTY TO
PARTICIPATE IN SUCH SETTLEMENT OR DEFENSE THROUGH COUNSEL CHOSEN BY THE
INDEMNIFIED PARTY; PROVIDED THAT THE FEES AND EXPENSES OF SUCH COUNSEL SHALL BE
BORNE BY THE INDEMNIFIED PARTY; AND

(III)          THE INDEMNIFYING PARTY SHALL AGREE PROMPTLY TO REIMBURSE THE
INDEMNIFIED PARTY FOR THE FULL AMOUNT OF ANY LOSS, DAMAGE OR THIRD PARTY COSTS
INCURRED BY THE INDEMNIFIED PARTY AS A RESULT OF SUCH CLAIM, BUT NOT INCLUDING
ANY ATTORNEY’S FEES OR EXPENSES OF THE INDEMNIFIED PARTY WHEN THE INDEMNIFYING
PARTY HAS ASSUMED THE DEFENSE AND NOT INCLUDING OVERHEAD OR PERSONNEL COSTS OF
THE INDEMNIFIED PARTY ARISING FROM COOPERATING WITH THE INDEMNIFYING PARTY; AND
SO LONG AS THE INDEMNIFYING PARTY IS REASONABLY CONTESTING ANY SUCH CLAIM IN
GOOD FAITH, THE INDEMNIFIED PARTY SHALL NOT PAY OR SETTLE ANY CLAIM.  IF THE
INDEMNIFYING PARTY DOES NOT NOTIFY THE INDEMNIFIED PARTY WITHIN 30 DAYS AFTER
RECEIPT OF THE INDEMNIFIED PARTY’S WRITTEN NOTICE OF A CLAIM OF INDEMNITY
HEREUNDER THAT IT ELECTS TO UNDERTAKE THE DEFENSE THEREOF, THE INDEMNIFIED PARTY
SHALL HAVE THE RIGHT TO CONTEST, SETTLE OR COMPROMISE THE CLAIM AT THE EXPENSE
OF THE INDEMNIFYING PARTY.  THE INDEMNIFIED PARTY SHALL, HOWEVER, NOTIFY THE
INDEMNIFYING PARTY WRITING OF ANY COMPROMISE OR SETTLEMENT OF ANY SUCH CLAIM.

(C)           NOTWITHSTANDING THE FOREGOING, IN THE EVENT OF ANY CLAIM BY A
THIRD PARTY AGAINST ANY INDEMNIFIED BUYER WITH RESPECT TO PARTICIPATIONS AND
RESIDUALS, BUYER SHALL BE PERMITTED (BUT NOT REQUIRED) TO PAY (OR CAUSE TO BE
PAID) THE AMOUNT OF SUCH THIRD PARTY CLAIM

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PRIOR TO DELIVERY OF NOTICE TO SELLER AND WITHOUT THE REQUIREMENT OF COMPLIANCE
WITH SECTION 9.3(B) IF A HEARING OR OTHER PROCEEDING REGARDING FORECLOSURE OF A
COMPANY ASSET IS SCHEDULED TO TAKE PLACE WITHIN TEN (10) DAYS, AND ANY AMOUNT
PAID TO SUCH THIRD PARTY SHALL CONSTITUTE A LOSS SUBJECT TO INDEMNIFICATION
PURSUANT TO SECTION 9.1(C).  IF BUYER SHALL MAKE ANY PAYMENTS PURSUANT TO THIS
SECTION 9.3(C), SELLER SHALL BE SUBROGATED TO ALL BUYER’S RIGHTS TO CONTEST THE
AMOUNT OF SUCH PAYMENT.

(D)           THE FOREGOING PROVISIONS OF SECTION 9.3 SHALL NOT APPLY TO TAX
MATTERS, WHICH INSTEAD SHALL BE GOVERNED BY SECTION 6.11.

9.4           SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  ALL REPRESENTATIONS
AND WARRANTIES IN THIS AGREEMENT SHALL SURVIVE THE CLOSING FOR A PERIOD OF 36
MONTHS; PROVIDED THAT THE INDEMNIFICATION OBLIGATIONS OF SECTION 9.1 (C) AND
THOSE OF SECTION 9.1(A) WITH RESPECT TO SECTION 4.19 (OWNERSHIP BY THE COMPANY,
NO INCONSISTENT ACTIONS) SHALL SURVIVE INDEFINITELY, AND THOSE OF SECTION 9.1(A)
WITH RESPECT TO SECTION  4.3 (NO UNDISCLOSED LIABILITIES) AND  4.10 (TAXES)
SHALL SURVIVE THE CLOSING UNTIL THE 30 DAYS AFTER THE EXPIRATION OF THE
APPLICABLE STATUTE OF LIMITATIONS WITH RESPECT THERETO; AND PROVIDED FURTHER
THAT ALL COVENANTS IN THIS AGREEMENT SHALL SURVIVE THE CLOSING IN ACCORDANCE
WITH THEIR TERMS (OR UNTIL THE EXPIRATION OF THE APPLICABLE STATUTE OF
LIMITATIONS, IF NO TERM IS SPECIFIED).  NO CLAIM MAY BE BROUGHT FOR BREACHES OR
ALLEGED BREACHES OF ANY REPRESENTATIONS OR WARRANTIES AFTER THE EXPIRATION OF
THE SURVIVAL PERIOD.

9.5           NO LIMITATION ON RIGHTS.

(A)           EXCEPT AS EXPRESSLY LIMITED HEREIN, THE RIGHTS OF BUYER AND SELLER
SET FORTH IN THIS ARTICLE 9 SHALL BE IN ADDITION TO ALL OTHER RIGHTS AND
REMEDIES WHICH OTHERWISE WOULD BE AVAILABLE TO BUYER OR SELLER AT LAW OR IN
EQUITY.

(B)           THE AMOUNT OF ANY LOSSES FOR WHICH INDEMNIFICATION IS PROVIDED
UNDER THIS ARTICLE 9 SHALL BE NET OF ANY AMOUNTS RECOVERED BY ANY INDEMNIFIED
PARTY FROM THIRD PARTIES (INCLUDING WITHOUT LIMITATION AMOUNTS RECOVERED UNDER
INSURANCE POLICIES).

9.6           TREATMENT OF INDEMNITY PAYMENTS.  THE PARTIES AGREE THAT, EXCEPT
AS REQUIRED PURSUANT TO A “DETERMINATION” AS DEFINED IN SECTION 1313(A) OF THE
CODE, ANY INDEMNITY PAYMENTS PURSUANT TO THIS AGREEMENT WILL BE TREATED FOR TAX
PURPOSES AS AN ADJUSTMENT TO THE PURCHASE PRICE.

9.7           NO RIGHT OF CONTRIBUTION.   SELLER SHALL HAVE NO RIGHT OF
CONTRIBUTION AGAINST THE COMPANY WITH RESPECT TO THE INDEMNIFICATION OBLIGATIONS
OF SELLER SET FORTH IN THIS ARTICLE 9.

ARTICLE 10

GENERAL PROVISIONS

10.1         FURTHER ASSURANCES.  FOLLOWING THE CLOSING, SELLER AGREES TO
EXECUTE AND DELIVER TO BUYER FROM TIME TO TIME UPON WRITTEN REQUEST BY BUYER (AT
SELLER’S EXPENSE), SUCH ADDITIONAL DOCUMENTS OR INSTRUMENTS CONSISTENT HEREWITH
AND TO PERFORM SUCH FURTHER ACTS AS BUYER MAY REASONABLY REQUIRE TO GIVE TO
BUYER THE FULL BENEFIT OF ALL OF THE PROVISIONS OF THIS

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AGREEMENT (WHICH SHALL INCLUDE THE TRANSFER TO BUYER OF ANY COMPANY ASSETS NOT
TRANSFERRED  THROUGH THE ACQUISITION BY BUYER OF ALL RIGHT TITLE AND INTEREST IN
THE COMPANY).  SELLER AND BUYER SHALL COOPERATE TO SEND, ON OR PROMPTLY
FOLLOWING THE CLOSING DATE, NOTICE LETTERS  (IN A FORM TO BE PROVIDED BY BUYER)
ADDRESSED FROM SELLER TO EACH LICENSEE UNDER THE COMPANY LICENSE AGREEMENTS THAT
INFORM SUCH LICENSEES OF THE CHANGE OF CONTROL IN LICENSOR AND PROVIDE, AS
NECESSARY, NEW CONTACT INFORMATION AND PAYMENT INSTRUCTIONS.  SELLER AGREES TO
REMIT TO BUYER ANY PAYMENTS UNDER THE COMPANY LICENSE AGREEMENTS RECEIVED BY IT
OR ANY OF ITS AFFILIATES AFTER THE CLOSING DATE.

10.2         TERMINATION.  THIS AGREEMENT MAY BE TERMINATED AT ANY TIME PRIOR TO
THE CLOSING, AS FOLLOWS:

(A)           BY MUTUAL WRITTEN CONSENT OF BUYER AND SELLER DULY AUTHORIZED BY
THEIR RESPECTIVE BOARDS OF DIRECTORS;

(B)           BY EITHER OF BUYER OR SELLER IF THE CLOSING SHALL NOT HAVE
OCCURRED ON OR BEFORE DECEMBER 31, 2006; PROVIDED, HOWEVER, THAT THE RIGHT TO
TERMINATE THIS AGREEMENT UNDER THIS SECTION 10.2 SHALL NOT BE AVAILABLE TO THE
PARTY WHOSE FAILURE TO FULFILL ANY OBLIGATION UNDER THIS AGREEMENT SHALL HAVE
BEEN THE CAUSE OF, OR RESULTED IN, THE FAILURE OF THE CLOSING TO OCCUR ON OR
BEFORE SUCH DATE;

(C)           BY EITHER OF BUYER OR SELLER IF ANY ORDER, INJUNCTION OR DECREE
PREVENTING THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY SHALL HAVE
BEEN ENTERED BY ANY COURT OF COMPETENT JURISDICTION OR GOVERNMENTAL ENTITY AND
SHALL HAVE BECOME FINAL AND NON-APPEALABLE;

(D)           BY BUYER IF (I) THERE SHALL HAVE BEEN A MATERIAL BREACH OF ANY
REPRESENTATION OR WARRANTY ON THE PART OF SELLER SET FORTH IN THIS AGREEMENT OR
IF ANY MATERIAL REPRESENTATION OR WARRANTY OF SELLER SHALL HAVE BECOME UNTRUE IN
EITHER CASE SUCH THAT THE CONDITION SET FORTH IN SECTION 7.2(A) WOULD BE OR
MIGHT REASONABLY BE EXPECTED TO BE INCAPABLE OF BEING SATISFIED BY DECEMBER 31,
2006 (AND FOR THE PURPOSES OF THIS CLAUSE, ANY INFORMATION PROVIDED BY SELLER
PURSUANT TO SECTION 6.11 SHALL BE DEEMED NOT TO QUALIFY THE SELLER’S
REPRESENTATIONS AND WARRANTIES); (II) THERE SHALL HAVE BEEN A MATERIAL BREACH OR
BREACHES BY SELLER OF ITS COVENANTS OR AGREEMENTS HEREUNDER SUCH THAT THE
CONDITION SET FORTH IN SECTION 7.2(A) WOULD BE INCAPABLE OF BEING SATISFIED BY
DECEMBER 31, 2006; OR (III) BETWEEN THE DATE OF THIS AGREEMENT AND THE CLOSING
THERE IS ANY MATERIAL ADVERSE CHANGE IN THE BUSINESS, OPERATIONS, ASSETS,
LIABILITIES, POSITION (FINANCIAL, TRADING OR OTHERWISE), PROFITS OR PROSPECTS OF
THE COMPANY OR ANY EVENT OR CIRCUMSTANCE THAT MAY REASONABLY RESULT IN SUCH A
MATERIAL ADVERSE CHANGE; OR

(E)           BY SELLER IF THERE SHALL HAVE BEEN A MATERIAL BREACH OR BREACHES
BY BUYER OF ITS COVENANTS OR AGREEMENTS HEREUNDER SUCH THAT THE CONDITION SET
FORTH IN SECTION 7.3(A) WOULD BE INCAPABLE OF BEING SATISFIED BY DECEMBER 31,
2006,

and in each of the cases set out in clauses (a)-(e) above the rights and
liabilities of the parties which have accrued prior to termination shall
continue to subsist and such termination shall be in addition to any other
rights or remedies the terminating party may have against the other party.

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10.3         DISPUTE RESOLUTION.  (A)  IN THE EVENT OF ANY CONTROVERSY OR CLAIM
ARISING OUT OF, OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE
INTERPRETATION, PERFORMANCE OR BREACH THEREOF, THE PARTIES HERETO SHALL USE
THEIR REASONABLE BEST EFFORTS TO SETTLE SUCH CONTROVERSY OR CLAIM.  TO THIS
EFFECT, THEY SHALL CONSULT AND NEGOTIATE WITH EACH OTHER IN GOOD FAITH AND,
RECOGNIZING THEIR MUTUAL INTERESTS, ATTEMPT TO REACH A JUST AND EQUITABLE
SOLUTION SATISFACTORY TO BOTH PARTIES.  IF THEY DO NOT REACH SUCH SOLUTION
WITHIN A PERIOD OF 30 DAYS, THEN UPON NOTICE BY EITHER PARTY TO THE OTHER, ANY
CONTROVERSY OR CLAIM SHALL BE SUBMITTED TO MEDIATION ADMINISTERED BY THE
AMERICAN ARBITRATION ASSOCIATION UNDER ITS COMMERCIAL MEDIATION RULES IN NEW
YORK BEFORE RESORTING TO ARBITRATION.

(B)           IN THE EVENT BUYER AND SELLER ARE UNABLE TO RESOLVE ANY
CONTROVERSY OR CLAIM ARISING OUT OF, OR IN CONNECTION WITH OR RELATING TO THIS
AGREEMENT OR THE INTERPRETATION, PERFORMANCE OR BREACH THEREOF PURSUANT TO
SECTION 10.3(A), THE PARTIES HERETO IRREVOCABLY AGREE TO SETTLE SUCH CONTROVERSY
OR CLAIM ARISING OUT OF, OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR
THE INTERPRETATION, PERFORMANCE OR BREACH THEREOF BY BINDING ARBITRATION UNDER
THE RULES THEN IN EFFECT OF THE AMERICAN ARBITRATION ASSOCIATION OR ITS
SUCCESSOR AND IN ACCORDANCE WITH APPLICABLE LAW BUT SUBJECT TO THE FOLLOWING
AGREED PROVISIONS.  THE ARBITRATION SHALL BE CONDUCTED IN NEW YORK, NEW YORK,
AND THE PROCEEDINGS SHALL BE KEPT CONFIDENTIAL.  NOTICE OF PAPERS OR PROCESSES
RELATING TO ANY ARBITRATION PROCEEDING, OR FOR THE CONFIRMATION OF AWARD AND
ENTRY OF JUDGMENT ON AN AWARD MAY BE SERVED ON EACH OF THE PARTIES BY REGISTERED
OR CERTIFIED MAIL AT THE ADDRESSES SET FORTH IN SECTION 10.7 HEREOF.  EACH
DISPUTE SHALL BE PROMPTLY ADJUDICATED BY A PANEL OF THREE NEUTRAL ARBITRATORS
APPOINTED AS FOLLOWS:

(I)            EACH PARTY SHALL NOMINATE AN ARBITRATOR, AND THE TWO ARBITRATORS
SO APPOINTED SHALL APPOINT A THIRD ARBITRATOR WHO SHALL ACT AS PRESIDENT OF THE
ARBITRAL TRIBUNAL;

(II)           IF EITHER PARTY FAILS TO NOMINATE AN ARBITRATOR WITHIN 30 DAYS OF
RECEIVING NOTICE OF THE NOMINATION OF AN ARBITRATOR BY THE OTHER PARTY, SUCH
ARBITRATOR SHALL AT THE REQUEST OF THAT PARTY BE APPOINTED BY THE AMERICAN
ARBITRATION ASSOCIATION;

(III)          IF THE TWO ARBITRATORS TO BE NOMINATED BY THE PARTIES FAIL TO
AGREE UPON A THIRD ARBITRATOR WITHIN 30 DAYS OF THE APPOINTMENT OF THE SECOND
ARBITRATOR, THE THIRD ARBITRATOR SHALL BE APPOINTED ON THE NOMINATION OF THE
AMERICAN ARBITRATION ASSOCIATION AT THE WRITTEN REQUEST OF EITHER PARTY; AND

(IV)          SHOULD A VACANCY ARISE BECAUSE ANY ARBITRATOR DIES, RESIGNS,
REFUSES TO ACT, OR BECOMES INCAPABLE OF PERFORMING HIS FUNCTIONS, THE VACANCY
SHALL BE FILLED BY THE METHOD BY WHICH THAT ARBITRATOR WAS ORIGINALLY APPOINTED.

All arbitrators shall be of good reputation and character and shall be highly
knowledgeable of entertainment industry matters.  Seller shall pay one-half of
the arbitrators’ expenses and Buyer shall pay one-half.  The parties shall pay
their own legal expenses.  The arbitrators shall provide a reasoned opinion
supporting their conclusion, including detailed findings of fact and conclusions
of law.  Such findings of fact shall be final and binding on the parties but
such conclusions of law shall be subject to appeal in any court of competent

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JURISDICTION.  THE ARBITRATORS MAY AWARD DAMAGES AND/OR PERMANENT INJUNCTIVE
RELIEF, BUT IN NO EVENT SHALL THE ARBITRATORS HAVE THE AUTHORITY TO AWARD
PUNITIVE OR EXEMPLARY DAMAGES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
SECTION 10.3, EITHER PARTY MAY APPLY TO A COURT OF COMPETENT JURISDICTION FOR
RELIEF IN THE FORM OF A TEMPORARY RESTRAINING ORDER OR PRELIMINARY INJUNCTION,
OR OTHER PROVISIONAL REMEDY PENDING FINAL DETERMINATION OF A CLAIM THROUGH
ARBITRATION IN ACCORDANCE WITH THIS SECTION 10.3.  IF PROPER NOTICE OF ANY
HEARING HAS BEEN GIVEN, THE ARBITRATORS WILL HAVE FULL POWER TO PROCEED TO TAKE
EVIDENCE OR TO PERFORM ANY OTHER ACTS NECESSARY TO ARBITRATE THE MATTER IN THE
ABSENCE OF ANY PARTY WHO FAILS TO APPEAR.

10.4         SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL INURE TO THE BENEFIT
OF AND BE BINDING UPON THE RESPECTIVE SUCCESSORS, LICENSEES AND ASSIGNS OF THE
PARTIES HERETO, BUT ANY SUCH ASSIGNMENT BY EITHER PARTY HERETO SHALL NOT RELIEVE
SUCH ASSIGNING PARTY OF ANY OF ITS OBLIGATIONS OR AGREEMENTS HEREUNDER; PROVIDED
THAT THIS AGREEMENT MAY NOT BE ASSIGNED BY ANY PARTY HERETO UNLESS EXPRESSLY
AGREED TO IN WRITING BY THE OTHER PARTY HERETO IN ITS SOLE DISCRETION (PROVIDED
THAT SUCH EXPRESS AGREEMENT IS NOT REQUIRED FOR ASSIGNMENTS BY BUYER TO AN
AFFILIATE OR FOR THE COLLATERAL ASSIGNMENT OF BUYER’S RIGHTS UNDER THIS
AGREEMENT TO ANY PERSON PROVIDING FINANCING RELATED TO THE TRANSACTIONS
CONTEMPLATED HEREBY).

10.5         NO WAIVER.  NO WAIVER BY EITHER PARTY HERETO OF ANY BREACH OF ANY
COVENANT, AGREEMENT, REPRESENTATION OR WARRANTY HEREUNDER SHALL BE DEEMED A
WAIVER OF ANY PRECEDING OR SUCCEEDING BREACH OF THE SAME.  THE EXERCISE OF ANY
RIGHT, POWER OR PRIVILEGE GRANTED TO EITHER PARTY HEREIN SHALL NOT OPERATE AS A
WAIVER OF ANY DEFAULT OR BREACH ON THE PART OF THE OTHER PARTY HERETO NOR SHALL
ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT, POWER OR PRIVILEGE PRECLUDE
ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT, POWER
OR PRIVILEGE.  EACH AND ALL OF THE SEVERAL RIGHTS AND REMEDIES OF EITHER PARTY
HERETO UNDER THIS AGREEMENT SHALL BE CONSTRUED AS CUMULATIVE AND NOT EXCLUSIVE
OF ANY RIGHTS OR REMEDIES PROVIDED BY LAW.

10.6         ENTIRE AGREEMENT; AMENDMENTS.  THIS AGREEMENT, INCLUDING THE
EXHIBITS ATTACHED HERETO AND ANY OTHER AGREEMENT OR DOCUMENT REFERRED TO IN THIS
AGREEMENT, CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL PRIOR OR CONTEMPORANEOUS
WRITTEN OR ORAL AGREEMENTS, ARRANGEMENTS, UNDERSTANDINGS, REPRESENTATIONS AND
CORRESPONDENCE BETWEEN THEM OR ANY OF THEIR RELATED ENTITIES OR AFFILIATES WITH
RESPECT TO THE SUBJECT MATTER HEREOF, EXCEPT FOR THE CONFIDENTIALITY AGREEMENT,
WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT, AND SHALL SURVIVE ANY TERMINATION
OF THIS AGREEMENT OR THE CLOSING, IN ACCORDANCE WITH ITS TERMS.  NO CHANGE,
MODIFICATION, ALTERATION, AMENDMENT OR AGREEMENT TO DISCHARGE IN WHOLE OR IN
PART, OR WAIVER OF ANY OF THE TERMS AND CONDITIONS OF THIS AGREEMENT, SHALL BE
BINDING UPON EITHER PARTY, UNLESS THE SAME SHALL BE MADE BY A WRITTEN INSTRUMENT
SIGNED AND EXECUTED BY THE AUTHORIZED REPRESENTATIVES OF EACH PARTY, WITH THE
SAME FORMALITY AS THE EXECUTION OF THIS AGREEMENT.

10.7         NOTICES.  ALL NOTICES, REQUESTS, DEMANDS AND OTHER COMMUNICATIONS
GIVEN OR MADE HEREUNDER OR IN CONNECTION WITH THE MATTERS CONTEMPLATED BY THIS
AGREEMENT, SHALL BE IN WRITING MADE BY PERSONAL SERVICE, OR SENT BY CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, BY OVERSEAS COURIER OR BY
FACSIMILE ADDRESSED AS FOLLOWS, OR TO SUCH OTHER ADDRESS AN MAY HEREAFTER BE
DESIGNATED IN WRITING BY THE RESPECTIVE PARTIES HERETO:

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(A)                  IF TO SELLER, TO:

CROWN MEDIA HOLDINGS, INC.
12700 VENTURA BOULEVARD, SUITE 100
STUDIO CITY, CALIFORNIA 91604
ATTENTION:  CHARLES L. STANFORD, GENERAL COUNSEL
TELEPHONE:  (818) 755-2469
FACSIMILE:  (818) 755-2461

with a copy to:

Christensen, Glaser, Fink, Jacobs, Glaser, Weil & Shapiro LLP
10250 Constellation Blvd.
19th Floor
Los Angeles, CA 90067
Attention:  Jeffrey C. Soza
Telephone:  (310) 553-3000
Facsimile:  (310) 556-2920

(B)                 IF TO BUYER, TO:

RHI ENTERPRISES, LLC
1325 AVENUE OF THE AMERICAS
21ST FLOOR
NEW YORK, NY 10019
ATTENTION:  ROBERT HALMI, JR.
TELEPHONE:  (212) 977-9001
FACSIMILE:  (212) 977-9049

with a copy to:

Kelso & Company, L.P.
320 Park Avenue
24th Floor
New York, NY 10022
Attention:  James Connors
Telephone:  (212) 751-3939
Facsimile:  (212) 223-2379

and

Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
Attention:  Raymond Y. Lin
Telephone:  (212) 906-1200
Facsimile:  (212) 751-4864

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and shall be deemed to have been duly given or made as follows:

(C)           IF PERSONALLY DELIVERED, UPON DELIVERY AT THE ADDRESS OF THE
RELEVANT PARTY;

(D)           IF SENT BY CERTIFIED MAIL, FIVE DAYS AFTER THE DATE OF POSTING;

(E)           IF SENT BY OVERSEAS COURIER, SEVEN DAYS AFTER THE DATE OF POSTING;
AND

(F)            IF SENT BY FACSIMILE, WHEN DISPATCHED.

10.8         GOVERNING LAW.  THIS AGREEMENT (AND ANY DISPUTE, CONTROVERSY,
PROCEEDINGS OR CLAIM OF WHATEVER NATURE ARISING OUT OF OR IN ANY WAY RELATING TO
THIS AGREEMENT OR ITS FORMATION) SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO SUCH STATE’S
PRINCIPLES OF CONFLICTS OF LAW.

10.9         PUBLICITY.  PRIOR TO THE CLOSING, EACH PARTY HERETO AGREES NOT TO
ISSUE ANY PRESS RELEASE OR OTHERWISE MAKE ANY PUBLIC STATEMENT IN ANY GENERAL
CIRCULATION MEDIUM WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, WITHOUT THE CONSENT, WHICH SHALL NOT BE UNREASONABLY WITHHELD OR
DELAYED, OF THE OTHER PARTY HERETO; PROVIDED, HOWEVER, THAT THE PARTIES HERETO
MAY, WITHOUT THE CONSENT OF THE OTHER, MAKE ANY DISCLOSURES REQUIRED TO COMPLY
WITH APPLICABLE LAW OR THE REGULATIONS OF ANY SECURITIES EXCHANGE OR NATIONAL
SECURITIES ASSOCIATION.

10.10       SECTION HEADINGS.  THE SECTION HEADINGS OF THIS AGREEMENT ARE FOR
CONVENIENCE OF REFERENCE ONLY AND SHALL NOT BE DEEMED TO ALTER OR AFFECT ANY
PROVISION HEREOF.

10.11       SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS HELD OR DEEMED
TO BE OR IS OR BECOMES, IN FACT, INOPERATIVE, ILLEGAL OR UNENFORCEABLE AS
APPLIED IN ANY PARTICULAR CASE UNDER ANY CONSTITUTION OR STATUTE OR RULE OF
PUBLIC POLICY OF ANY JURISDICTION:

(A)           THE OPERATION, LEGALITY AND ENFORCEABILITY UNDER THE CONSTITUTION
OR STATUTE OR RULE OF PUBLIC POLICY OF THAT JURISDICTION OF ANY OTHER PROVISION;
AND

(B)           THE OPERATION, LEGALITY AND ENFORCEABILITY UNDER THE CONSTITUTION
OR STATUTE OR RULE OF PUBLIC POLICY OF ANY OTHER JURISDICTION OF THAT OR ANY
OTHER PROVISION SHALL NOT BE AFFECTED OR IMPAIRED IN ANY WAY.

10.12       COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED SIMULTANEOUSLY IN ANY
NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL BUT ALL OF
WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.  ANY PARTY MAY
ENTER INTO THIS AGREEMENT BY EXECUTING A COUNTERPART AND THIS AGREEMENT SHALL
NOT TAKE EFFECT UNTIL IT HAS BEEN EXECUTED BY ALL PARTIES.

*              *              *

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

CROWN MEDIA HOLDINGS, INC.

 

 

 

 

By:

/s/ Charles L. Stanford

 

Name:

Charles L. Stanford

 

Title:

Executive Vice President, General Counsel

 

 

 

 

 

 

 

CM INTERMEDIARY, LLC

 

 

 

 

By:

/s/ Charles L. Stanford

 

Name:

Charles L. Stanford

 

Title:

Vice President

 

 

 

 

 

 

 

CROWN MEDIA DISTRIBUTION, LLC

 

 

 

 

By:

/s/ Charles L. Stanford

 

Name:

Charles L. Stanford

 

Title:

Vice President

 

 

 

 

 

 

 

RHI ENTERPRISES, LLC

 

 

 

 

By:

/s/ Peter von Gal

 

Name:

Peter von Gal

 

Title:

Authorized Signatory

 

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