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PURCHASE AND SALE AGREEMENT by and among UBI PARTICIPATIONS S.A.

as the Purchaser and GTG/WIZARD, LLC, TLC MULTIMEDIA LLC, MINDSCAPE LLC, BRODERBUND SOFTWARE, INC., PF. MAGIC, LLC, PALLADIUM INTERACTIVE LLC, and STRATEGIC SIMULATIONS LLC as the Sellers ___________________ Dated as of March 1, 2001

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PURCHASE AND SALE AGREEMENT This PURCHASE AND SALE AGREEMENT (this "Agreement") is made and dated as of March 1, 2001, by and among Ubi Participations S.A., a Socit Anonyme duly organized and formed under French law (the "Purchaser"), GTG/Wizard, LLC, a Delaware limited liability company (the "Company"), TLC Multimedia LLC, a Minnesota limited liability company ("Multimedia"), Mindscape LLC, a Delaware limited liability company ("Mindscape"), Broderbund Software, Inc., a Delaware corporation ("Broderbund"), PF. Magic, LLC, a Delaware limited liability company ("PF. Magic"), Palladium Interactive LLC, a Delaware limited liability company ("Palladium"), and Strategic Simulations LLC, a Delaware limited liability company ("Simulations"). Multimedia, Mindscape, Broderbund, PF. Magic, Palladium and Simulations are collectively referred to herein as the "TLC Operating Subsidiaries" and individually as a "TLC Operating Subsidiary" and the TLC Operating Subsidiaries are referred to herein collectively with the Company as the "Sellers" and the Sellers are sometimes referred to individually herein as a "Seller." RECITALS WHEREAS, the Company is engaged in the business of developing, publishing and marketing consumer entertainment software products; WHEREAS, the Company desires to sell, and the Purchaser desires to purchase, all of the outstanding membership interests of TLC Entertainment Properties LLC, a Delaware limited liability company (the "Acquired Subsidiary"), on the terms and conditions set forth herein; WHEREAS, the TLC Operating Subsidiaries desire to sell, and the Purchaser desires to purchase, certain assets related to the Company's business and, in connection therewith, the Purchaser is willing to assume certain liabilities related to the Company's business, in each case on the terms and conditions expressly set forth herein; WHEREAS, simultaneously with the closing of the transactions contemplated hereby, the Purchaser and the Company will enter into several collateral agreements as provided herein; and WHEREAS, the Purchaser and the Sellers desire to make certain representations, warranties, covenants and agreements in connection with this Agreement. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I DEFINITIONS For purposes of this Agreement: "Affiliate" shall mean, when used with respect to any Seller, any corporation or limited liability company controlled by the Company, and shall mean, when used with respect to the Purchaser, USE (as defined herein) or any direct or indirect subsidiary of USE. "Bill of Sale" shall mean that certain Bill of Sale and Assumption Agreement to be executed by the Sellers and the Purchaser concurrently with the Closing as provided in Section 2.6(d). "Business Day" shall mean any day other than Saturdays, Sundays and days when commercial banks are authorized to be closed in Los Angeles, California or Paris, France. "Contracts" shall mean contracts, undertakings, commitments or agreements. "LLC Interest" shall mean all of the outstanding limited liability company interests of the Acquired Subsidiary. "Lock Up Agreement" shall mean that certain Lock Up Agreement to be executed by the Company and the Purchaser concurrently with the Closing as provided in Section 2.6(f). "Person" shall mean a person, corporation, socit anonyme, association, partnership, limited liability company, joint venture, trust or other entity or organization. "Related Agreements" shall mean, collectively, the Bill of Sale, the Transition Services Agreement, the Lock Up Agreement, the Side Letter and the Sublease. "Sublease" shall mean that certain Sublease to be executed by the Company and the Purchaser concurrently with the Closing as provided in Section 2.6(g). "Tax" or "Taxes" shall mean all taxes, charges, fees, levies, duties, imposts or other assessments or charges imposed by and required to be paid to any federal, state, local or foreign taxing authority, including, without limitation, income, excise, property, sales, use, transfer, gains, ad valorem or value added, stamp, payroll, windfall, profits, gross receipts, employment, withholding, social security, workers' compensation, unemployment compensation, documentation, license, registration, customs duties, tariffs, net worth and franchise taxes (including any interest, penalties or additions attributable to or imposed on or with respect to any such assessment) and any estimated payments or estimated taxes.

"Tax Return" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. "TLC Entertainment Assets" shall mean the assets listed in Section 2.1(a) of the TLC Disclosure Schedule that are owned by any TLC Operating Subsidiary or by the Acquired Subsidiary as of the Closing Date. "TLC Entertainment Business" shall mean the business of developing, publishing, marketing and selling certain consumer entertainment software products, as currently conducted by the Company through the Company's entertainment division. "TLC Material Adverse Effect" shall mean a material adverse change in, or effect on the business, results of operations or financial condition of the TLC Entertainment Business taken as a whole; provided, however, that none of the following shall be deemed by itself or by themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been, could be or will be a TLC Material Adverse Effect: (i) any failure by the Company or the TLC Entertainment Business to meet internal projections or forecasts or published revenue or earnings predictions for any period ending (or for which revenues or earnings are released) on or after the Effective Date of this Agreement; (ii) any earnings (or losses) consistent with the estimates, forecasts or projections that on or prior to the date hereof have been disclosed to the Purchaser; (iii) results of the litigation set forth in the TLC Disclosure Schedule; (iv) conditions affecting the educational, entertainment and/or productivity software industries as a whole; (v) conditions affecting the U.S. economy as a whole or foreign economies in any locations where the TLC Entertainment Business or any of the TLC Operating Subsidiaries have operations or sales (including, without limitation, prevailing interest rate levels); (vi) conditions resulting from or relating to compliance with the terms of, or the taking of any action required by, this Agreement; or (vii) any effect arising out of or resulting from actions contemplated by the parties in connection with, or which is attributable to, the announcement of the disposition by the Company of the TLC Entertainment Business or the announcement, execution or consummation of this Agreement and the transactions contemplated hereby. "Transition Services Agreement" shall mean that certain Transition Services Agreement to be executed by the Company and the Purchaser concurrently with the Closing as provided in Section 2.6(e). "USE" shall mean Ubi Soft Entertainment S.A., a Socit Anonyme duly organized and formed under French Law. "USE Stock" shall mean the actions ordinaires, par value Two Francs per share, of USE.

ADDITIONAL DEFINITIONS Term Section No.

Acquired Subsidiary..............................................................................................................Recitals Acquired Subsidiary Contracts.....................................................................................................3.8 Action............................................................................................................................................3.6 Additional TLC IP........................................................................................................................5.4 Agreement...........................................................................................................................Preamble Assumed Liabilities..................................................................................................................2.2(a) Broderbund.........................................................................................................................Preamble Cash Payment................................................................................................................................2.3 Claim........................................................................................................................................6.4(a) Closing......................................................................................................................................2.1(a) Closing Date.............................................................................................................................2.6(a) Code........................................................................................................................................3.13(e) Company.............................................................................................................................Preamble Confidentiality Agreements..........................................................................................................7.3 Contracts to be Assigned..............................................................................................................3.8 Excluded Assets.......................................................................................................................2.1(b) Excluded Liabilities..................................................................................................................2.2(b) ............................................................................................................................................................ Foothill.....................................................................................................................................2.4(c) Foothill Agreement...................................................................................................................2.4(c) Governmental Entity................................................................................................................3.4(b) Indemnification Notice.............................................................................................................6.4(a) Indemnified Party.....................................................................................................................6.4(a) Indemnifying Party...................................................................................................................6.4(a) Leased Equipment.......................................................................................................................5.24 Liens..............................................................................................................................................3.3 Mattel.......................................................................................................................................2.4(d) Mattel Agreement.....................................................................................................................2.4(d) Mindscape...........................................................................................................................Preamble Multimedia..........................................................................................................................Preamble New Employer..........................................................................................................................5.6(a) New Product Launches...............................................................................................................5.15 Offer Date.................................................................................................................................5.6(a) Palladium............................................................................................................................Preamble PF. Magic............................................................................................................................Preamble Pre-Closing Expenses.................................................................................................................5.15 Purchased Inventory......................................................................................................................5.2 ............................................................................................................................................................ Purchaser.............................................................................................................................Preamble 5

Purchaser Equipment..................................................................................................................5.24 Purchaser Indemnified Parties..................................................................................................6.2(a) Purchaser Losses..............................................................................................6.2(a) Purchaser's Price List Products...................................................................................................5.23 Retained SKU's...........................................................................................................................5.23 Seller...................................................................................................................................Preamble Seller Indemnified Parties........................................................................................................6.3(a) Seller Losses.....................................................................................................6.3(a) Side Letter................................................................................................................................2.4(a) ........................................................................................................................................................... Simulations.........................................................................................................................Preamble ............................................................................................................................................................ SKU...............................................................................................................................................5.2 Sublet Premises........................................................................................................................2.6(g) Termination Time.........................................................................................................................2.7 TLC Contracts...............................................................................................................................3.8 TLC Disclosure Schedule..................................................................................................Article III TLC Entertainment Employees................................................................................................5.6(a) TLC Intellectual Property Rights...........................................................................................3.11(a) TLC Operating Subsidiaries...............................................................................................Preamble TLC Trademarks and Logos.......................................................................................................5.11 USE Filings.................................................................................................................................4.10 USE Shares..................................................................................................................................2.3 ARTICLE II PURCHASE AND SALE; THE CLOSING 2.1 Acquired Assets and Excluded Assets.

(a) At the closing of the transactions contemplated hereby (the "Closing"), (i) the Company shall sell, transfer, convey, assign and deliver to the Purchaser, and the Purchaser shall purchase and acquire, all of the Company's rights in the LLC Interest, and the TLC Operating Subsidiaries shall sell, transfer, convey and assign to the Purchaser, and the Purchaser shall purchase and acquire, all of the TLC Operating Subsidiaries' respective rights in the TLC Entertainment Assets. (b) Except for the TLC Entertainment Assets, the Purchaser shall not acquire, or be deemed to acquire, under this Agreement or otherwise by reason of the transactions contemplated hereby, any other assets of the Sellers or any of their Affiliates of any nature whatsoever. The Purchaser expressly understands and agrees that the TLC Entertainment Assets do not include certain assets used in or related to the TLC Entertainment Business, including, without limitation, the assets listed in Section 2.1(b) of the TLC Disclosure Schedule (as such term is defined in the preamble to Article III below) (collectively, the "Excluded Assets"). 6

2.2

Assumed Liabilities and Excluded Liabilities.

(a) At the Closing, Purchaser shall assume those liabilities and obligations of the Sellers and their Affiliates that are listed in Section 2.2(a) of the TLC Disclosure Schedule (collectively, the "Assumed Liabilities"). (b) Except for the Assumed Liabilities, the Purchaser shall not assume, or be deemed to assume, under this Agreement or otherwise by reason of the transactions contemplated hereby, any other liabilities, obligations or commitments of the Sellers or any of their Affiliates of any nature whatsoever, including, but not limited to, any liability or obligation of the Sellers listed in Section 2.2(b) of the TLC Disclosure Schedule (collectively, the "Excluded Liabilities"). 2.3 Consideration. The consideration for the sale, transfer, conveyance, assignment and delivery to the Purchaser of the LLC Interest and the TLC Entertainment Assets shall consist of (i) the assumption of the Assumed Liabilities, (ii) the transfer to the Company of 440,407 shares of USE Stock (the "USE Shares"), and (iii) a cash payment of Ten Million Dollars $10,000,000 (the "Cash Payment"). 2.4 Conditions Precedent to Closing.

(a) Completion of Confirmatory Due Diligence. Promptly following the execution of this Agreement, the Purchaser shall have the right to conduct confirmatory due diligence concerning the TLC Entertainment Business as described in that certain letter of even date herewith from the Purchaser to the Company (the "Side Letter"). As soon as possible after the completion of the confirmatory due diligence, and in any event no later than 5:00 p.m., P.S.T., on Friday, March 2, 2001, the Purchaser shall inform the Company in writing whether or not the Purchaser is satisfied with the results of its confirmatory due diligence and, if the Purchaser is not satisfied, the basis for such dissatisfaction. If Purchaser informs the Company that the Purchaser is satisfied with the results of its confirmatory due diligence investigation (or fails to provide the required written notice to the Company in a timely manner), then the condition precedent set forth in this Section 2.4(a) shall be deemed satisfied. If Purchaser notifies the Company in a timely manner that it is not satisfied with the results of its confirmatory due diligence, then the Purchaser shall be deemed to have elected to terminate this Agreement, in which event, the obligations of the parties under this Agreement shall automatically terminate and be of no further force or effect, and no party shall have any liability or obligation hereunder to any other party as a result of such termination. (b) [Intentionally Deleted].

(c) Foothill's Consent. The obligations of the Sellers to consummate the transactions contemplated by this Agreement shall be subject to the receipt by the Company of 7

any and all consents of Foothill Capital Corporation ("Foothill") required under that certain Loan and Security Agreement dated as of October 17, 2000 between the Company, Foothill and certain other parties (the "Foothill Agreement") in connection with the consummation of the transactions contemplated by this Agreement or the amendment of the Foothill Agreement in connection therewith. The Company shall notify the Purchaser in writing upon receipt of the requisite consent from Foothill and, if the Company is not able to obtain the requisite consent from Foothill prior to the Termination Time (as defined below), the Company shall inform the Purchaser in writing of the basis for Foothill's refusal to grant such consent. (d) Mattel's Consent. The obligations of the Sellers to consummate the transactions contemplated by this Agreement shall be subject to the receipt by the Company of any and all consents of Mattel, Inc. ("Mattel") required under that certain Sale and Purchase Agreement dated as of September 28, 2000 between the Company, Mattel and certain other parties (the "Mattel Agreement") in connection with the amendment of the Foothill Agreement. The Company shall notify the Purchaser in writing upon receipt of the requisite consent from Mattel and, if the Company is not able to obtain the requisite consent from Mattel prior to the Termination Time, the Company shall inform the Purchaser in writing of the basis for Mattel's refusal to grant such consent. 2.5 Obligations Prior to the Closing.

(a) Within twenty-four (24) hours of the date set forth on the first page hereof, representatives of the Company and Purchaser or its Affiliate shall meet and shall determine what SKU (as such term is defined below) shipments relating to the TLC Entertainment Assets shall be suspended until the earlier of (i) the Closing, or (ii) the Termination Time, to the extent reasonably practicable; provided, however, that any Seller may, subject to the terms and conditions of this Agreement, make shipments of any product related to the TLC Entertainment Assets to a customer in accordance with any marketing commitment existing on the date hereof which requires the shipment of such SKU; further, provided that the Purchaser or any of its Affiliates shall have final decision making authority with respect to suspending shipments, such decision making to not be exercised unreasonably. (b) Sellers and their Affiliates shall not, from the period of time commencing with the execution of this Agreement and continuing until the earlier of (i) the Closing, or (ii) the Termination Time, enter into any distribution agreements relating to the TLC Entertainment Assets, or renewals of any existing agreements, with any customers, new or existing, or extend the term of any existing distribution agreements, without the prior written consent of the Purchaser, which consent shall be in the Purchaser's sole discretion. 2.6 Closing and Actions to Be Taken At Closing.

(a) The Closing shall take place at the offices of Offner & Anderson, P.C., 1875 Century Park East, Suite 800, Los Angeles, California 90067 or at such other place as may 8

be mutually agreed upon by the parties, on the first Business Day following the satisfaction or written waiver of the conditions precedent to Closing described in Section 2.4 above, or such later date as the parties may mutually agree in writing. (The date on which the Closing occurs is sometimes referred to herein as the "Closing Date.") (b) At the Closing, the Purchaser shall deliver to the Company the Cash Payment and the payments required pursuant to Sections 5.15 and 5.24 of this Agreement, via wire transfers to such accounts as the Company may designate. (c) At the Closing, the Purchaser shall deliver to the Company evidence reasonably satisfactory to the Company that the Purchaser holds the USE Shares, free and clear of all Liens, in one or more accounts under the Purchaser's exclusive direction and control. At the Closing, the Purchaser shall deliver to the Company evidence reasonably satisfactory to the Company that the Purchaser has, as of or prior to the Closing Date, delivered such irrevocable instructions and other instruments to such persons as shall be sufficient to ensure that good and marketable title to the USE Shares, free of all Liens (as defined below), will be transferred to the Company as soon as practicable, but in any event within five (5) Business Days, following the Closing. (d) The Sellers and the Purchaser shall execute and deliver a Bill of Sale/Assignment and Assumption Agreement in the form attached hereto as Exhibit A. (e) The Sellers and the Purchaser shall execute and deliver a Transition Services Agreement in the form attached hereto as Exhibit B. (f) The Company shall execute and deliver to the Purchaser a Lock Up Agreement in the form attached hereto as Exhibit C. (g) The Company and the Purchaser shall execute and deliver a Sublease with respect to 12,000 square feet of the third floor of the premises leased by an Affiliate of the Company at 500 Redwood Boulevard in Novato, California (the "Sublet Premises"), in the form attached hereto as Exhibit D. (h) Purchaser shall deliver to the Sellers an action by written resolution of the board of directors of Purchaser, which resolutions shall be certified by Purchaser's secretary or equivalent thereof under French law, approving, authorizing and directing Purchaser to execute and deliver this Agreement and all Related Agreements thereto, and approving, authorizing and directing the Purchaser's performance of all obligations hereunder and thereunder. 2.7 Termination. In the event that the Closing has not occurred prior to 5:00 p.m., P.S.T., on Monday, March 5, 2001 (the "Termination Time") due to the failure to satisfy any of the conditions precedent set forth in Sections 2.4(c) or (d), the Purchaser or the Sellers may, upon written notice, terminate this Agreement, in which event the obligations of the parties under 9

this Agreement shall, upon the giving of such notice, automatically terminate and be of no further force or effect, and no party shall have any liability or obligation hereunder to any other party as a result of such termination. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to the Purchaser that the statements contained in this Article III are, to the knowledge of the Company, true and correct except as set forth in the disclosure schedule delivered by the Company to the Purchaser on or before the date of this Agreement (the "TLC Disclosure Schedule"). 3.1 Organization and Qualification. Except as provided in Section 3.1 of the TLC Disclosure Schedule, each Seller and the Acquired Subsidiary are duly organized, validly existing and in good standing under the laws of the jurisdiction of their respective organization, with the corporate or limited liability company power and authority, as the case may be, to own and operate their respective businesses as presently conducted, except for any failure to be in good standing or to have such power or authority that would not have a TLC Material Adverse Effect. Except as provided in Section 3.1 of the TLC Disclosure Schedule, each Seller and the Acquired Subsidiary are duly qualified as foreign corporations or limited liability companies, as the case may be, and are in good standing in each jurisdiction where the character of their respective properties owned or held under lease or the nature of their respective activities makes such qualification necessary, except for such failures to be in good standing or so qualified as would not, individually or in the aggregate, have a TLC Material Adverse Effect. 3.2 Authorization; Validity and Effect of Agreement. Each Seller has the requisite corporate or limited liability company power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Sellers and the performance by the Sellers of their respective obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors or other governing body of each Seller and all other necessary action on the part of each Seller and no other corporate or limited liability company proceedings on the part of any Seller are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by each Seller and, assuming that it has been duly authorized, executed and delivered by the Purchaser, constitutes a legal, valid and binding obligation of each Seller, enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

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3.3 Capitalization; Liens. The LLC Interest (i) represents all of the outstanding limited liability company interests in the Acquired Subsidiary, (ii) was validly issued and (iii) is fully paid and nonassessable and there are no other outstanding equity interests in the Acquired Subsidiary or any subscriptions, options, warrants, calls, rights, convertible securities or other agreements or commitments of any character obligating the Acquired Subsidiary to issue, transfer or sell any equity interest in the Acquired Subsidiary, or any agreements, arrangements, or understandings granting any Person any rights in the Acquired Subsidiary similar to capital stock or other equity interests, including, without limitation, stock appreciation and profit participation rights. Except as set forth in Section 3.3 of the TLC Disclosure Schedule, the LLC Interest is owned of record and beneficially by the Company, free and clear of all liens, pledges, charges, claims, security interests, purchase agreements, options, title defects, restrictions on transfer or other encumbrances and agreements of any nature whatsoever, whether consensual, statutory or otherwise (collectively, "Liens"). 3.4 No Conflict; Required Filings and Consents.

(a) Neither the execution and delivery of this Agreement by any Seller, nor the performance by any Seller of its obligations hereunder, nor the consummation of the transactions contemplated hereby, will (i) conflict with any Seller's or the Acquired Subsidiary's certificate of incorporation or bylaws or other comparable charter or organizational documents; (ii) violate any statute, law, ordinance, rule or regulation, applicable to any Seller or the Acquired Subsidiary or any of the properties or assets of any Seller or the Acquired Subsidiary; or (iii) except as set forth in Section 3.4(a) of the TLC Disclosure Schedule, violate, breach, be in conflict with or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or permit the termination of any provision of, or result in the termination of, the acceleration of the maturity of, or the acceleration of the performance of any obligation of any Seller or the Acquired Subsidiary under, or result in the creation or imposition of any lien upon any properties, assets or business of any Seller or the Acquired Subsidiary under, any TLC Contract or any order, judgment or decree to which any Seller or the Acquired Subsidiary is a party or by which any Seller or the Acquired Subsidiary or any of their respective assets or properties is bound or encumbered except, in the case of clauses (ii) and (iii), for such violations, breaches, conflicts, defaults or other occurrences which, individually or in the aggregate, would not have a TLC Material Adverse Effect. Without limiting the generality of the foregoing, no direct or indirect subsidiary of any Seller has any enforceable right to distribute any product or product line included in the TLC Entertainment Assets that cannot be unilaterally terminated by such Seller in connection with the consummation of the transactions contemplated hereby, and any such distribution rights will be so terminated as of the Closing Date. (b) Except as set forth in Section 3.4(b) the TLC Disclosure Schedule, no consent, approval or authorization of, permit from, or declaration, filing or registration with, any court, administrative agency, commission or other governmental authority, body or instrumentality, federal, state, local, domestic or foreign governmental or regulatory authority ("Governmental Entity"), or any other Person is required to be made or obtained by Seller in connection with the execution, delivery and performance of this Agreement and the 11

consummation of the transactions contemplated hereby, except where the failure to obtain such consent, approval, authorization, permit or declaration or to make such filing or registration would not, individually or in the aggregate, have a TLC Material Adverse Effect. 3.5 Compliance. Except as set forth in Section 3.5 of the TLC Disclosure Schedule, each Seller and the Acquired Subsidiary are in compliance with all foreign, federal, state and local laws and regulations of a Governmental Entity applicable to their respective operations or with respect to which compliance is a condition of engaging in the business thereof, except to the extent that failure to comply would not, individually or in the aggregate, have a TLC Material Adverse Effect. Sellers and the Acquired Subsidiary have not received any notice asserting a failure, or possible failure, to comply with any such law or regulation, the subject of which notice has not been resolved as required thereby or otherwise to the satisfaction of the party sending the notice, except for any such failure as would not, individually or in the aggregate, have a TLC Material Adverse Effect. Each Seller and the Acquired Subsidiary holds all permits, licenses and franchises from Governmental Entities required to conduct its respective business as it is now being conducted, except for such failures to have such permits, licenses and franchises as would not, individually or in the aggregate, have a TLC Material Adverse Effect. 3.6 Litigation. Except for the matters set forth in Section 3.6 of the TLC Disclosure Schedule, there is no (i) action, claim, suit, litigation, proceeding, or governmental investigation ("Action") instituted, pending or threatened, against any Seller or the Acquired Subsidiary relating to the TLC Entertainment Business, which, individually or in the aggregate, directly or indirectly, would reasonably be likely to have a TLC Material Adverse Effect, or (ii) outstanding judgment, decree or injunction, against any Seller or the Acquired Subsidiary relating to the TLC Entertainment Business which, individually or in the aggregate, has or would reasonably be likely to have a TLC Material Adverse Effect. 3.7 The Sublet Premises. Seller holds a valid leasehold interest in the Sublet Premises, free and clear of any and all Liens, except for (i) Liens for Taxes not yet due and payable or which are being contested in good faith; (ii) carriers, management, mechanics, institutions, repairman or other like liens arising in the ordinary course of business and not overdue; (iii) easements, rights of way, encroachments, restrictions, conditions and other similar encumbrances incurred in the ordinary course of business; and (iv) other Liens that would not, individually or in the aggregate, result in a TLC Material Adverse Effect. True and correct copies of all of the principal documents under which the Sublet Premises are leased by the Company have been delivered or made available for review to the Purchaser. Neither the Company nor the lessor is in material default under such lease and no defaults (whether or not subsequently cured) by the Company or the lessor have been alleged thereunder, except for such defaults that, individually, or in the aggregate, are not reasonably likely to have a TLC Material Adverse Effect. 3.8 Contracts. Section 3.8(a) of the TLC Disclosure Schedule contains a complete and accurate list of all Contracts that are being assigned to the Purchaser by a TLC Operating Subsidiary pursuant to this Agreement (the "Contracts to be Assigned") and Section 3.8(b) of the TLC Disclosure Schedule contains a complete and accurate list of all Contracts to which the 12

Acquired Subsidiary is a party or by which the Acquired Subsidiary is bound (the "Acquired Subsidiary Contracts" and, together with the Contracts to be Assigned, the "TLC Contracts"). True copies of the TLC Contracts as in effect on the date hereof, have been delivered or made available to the Purchaser. As of the date of this Agreement, (i) each of the TLC Contracts is valid and binding in accordance with its terms and is in full force and effect; and (ii) there is no material breach or violation of or default by any party to any TLC Contract and no event has occurred with respect to any Seller which, with notice or lapse of time or both, would constitute a material breach, violation or default, or give rise to a right of termination, modification, cancellation, foreclosure, imposition of a Lien, prepayment or acceleration under any TLC Contract, other than any such failure to be valid and binding and in full force and effect, breach, violation, default or event, as applicable, which, individually or in the aggregate, would not be reasonably likely to have a TLC Material Adverse Effect. 3.9 Distribution and Outbound Licensing Agreements.

(a) Section 3.9(a) of the TLC Disclosure Schedule truly and correctly lists all material distribution and outbound licensing Contracts to which any Seller or any Affiliate of the Company is a party that relate solely and exclusively to the TLC Entertainment Business. (b) Section 3.9(b) of the TLC Disclosure Schedule truly and correctly lists all material distribution and outbound licensing Contracts to which any Seller or any Affiliate of the Company is a party that relate both to the TLC Entertainment Business and to other aspects of the Company's business. 3.10 Labor Relations. Except as would not be reasonably likely to have a TLC Material Adverse Effect, as of the date of this Agreement, there are no (i) activities or proceedings of any labor union to organize any non-unionized TLC Entertainment Employees; (ii) unfair labor practice charges and/or complaints pending against any Seller before the National Labor Relations Board, or any similar foreign labor relations governmental bodies, or any current union representation questions involving any TLC Entertainment Employees; or (iii) strike, slowdown, work stoppage or lockout, or threat thereof, by or with respect to any TLC Entertainment Employees. As of the date of this Agreement, no Seller is a party to any collective bargaining agreement. There are no controversies pending or threatened between Seller and any TLC Entertainment Employees, except for such controversies that would not be reasonably likely to have a TLC Material Adverse Effect. Section 3.10 of the TLC Disclosure Schedule contains a true and accurate list of the TLC Entertainment Employees, their current compensation and certain benefits. 3.11 Intellectual Property.

(a) The Sellers own, or are licensed or otherwise possess, legally enforceable rights to use, make, distribute, display, perform, produce and/or sell all patents, trademarks, trade names, service marks and copyrights, any applications for and registrations of such patents, trademarks, 13

trade names, service marks and copyrights, and all processes, formulae, methods, schematics, technology, know-how, computer software programs or applications, tangible or intangible proprietary information or material, waivers or licenses of publicity or privacy rights or any other third party licenses that are included in the TLC Entertainment Assets (collectively the "TLC Intellectual Property Rights"), subject to such exceptions as would not reasonably be anticipated to have a Material Adverse Effect. (b) Except as set forth in Section 3.11(b) of the TLC Disclosure Schedule, the execution and delivery of this Agreement and consummation of the transactions contemplated hereby will not result in the breach of, or create on behalf of any third party the right to terminate or modify, any license, sublicense or other agreement relating to the TLC Intellectual Property Rights, in each case other than a termination, modification or breach which, individually or in the aggregate, would not be reasonably likely to have a TLC Material Adverse Effect. (c) Except to the extent set forth in Section 3.11(c) of the TLC Disclosure Schedule or as would not reasonably be likely to have a TLC Material Adverse Effect, (i) all trademarks, service marks and copyrights included in the TLC Entertainment Assets are valid and subsisting, (ii) there are no pending Actions involving, and no Seller has received in writing notice of any claim or notice which involves, a claim of infringement or violation of any patents, trademarks, service marks, copyrights, trade secrets, right of privacy or publicity or any other proprietary right of any third party or libel or defamation in connection with any TLC Intellectual Property Rights and (iii) there are no known infringements of any of the TLC Intellectual Property Rights. (d) All Persons employed in the TLC Entertainment Business as employees, contractors or otherwise, who have created and/or developed any TLC Intellectual Property Rights (exclusive of any such creation and/or development related to the Excluded Assets), have executed a written assignment and/or agreement to assign all right, title and interest in and to such TLC Intellectual Property Rights to a Seller as a work made for hire, free and clear of any encumbrance or claim of ownership or interest, except to the extent that the absence of any such assignment or agreement, either individually or in the aggregate, could not reasonably be expected to have a TLC Material Adverse Effect. 3.12 No Changes. Except as contemplated by this Agreement, since November 1, 2000, there has been no event or change that would reasonably be anticipated to have a TLC Material Adverse Effect. 3.13 Tax Matters.

(a) The Acquired Subsidiary has filed all Tax Returns that it was required to file, all such Tax Returns were correct and complete in all respects and all Taxes owed by the Acquired Subsidiary (whether or not shown on any Tax Return) have been paid, and the Acquired Subsidiary is not currently the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where the 14

Acquired Subsidiary does not file Tax Returns that the Acquired Subsidiary is or may be subject to taxation by that jurisdiction. There are no Tax Liens or similar security interests on any of the assets of the Acquired Subsidiary or on any of the TLC Entertainment Assets that arose in connection with any failure (or alleged failure) to pay any Tax, and no Tax Liens or similar security interests are threatened as a result of any failure to timely pay any Tax. (b) Since inception, the Acquired Company has not employed any person who was required to be classified as an employee for United States federal income tax purposes. (c) No director or officer (or employee responsible for Tax matters) of the Acquired Subsidiary or of any Seller expects any authority to assess any additional Taxes with respect to the Acquired Subsidiary for any period. There is no dispute or claim concerning any liability related to the Taxes of the Acquired Subsidiary either (A) claimed or raised by any authority in writing or (B) as to which any of the directors and officers (and employees responsible for Tax matters) of the Acquired Subsidiary or any Seller has knowledge based upon personal contact with any agent of such authority. The Seller has delivered to the Purchaser correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by the Acquired Subsidiary since October 19, 2000. (d) The Acquired Subsidiary has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. (e) The Acquired Subsidiary has not made, is not obligated to make, and is not a party to any agreement that under certain circumstances could obligate it to make, any payments that will not be deductible under Section 280G of the Internal Revenue Code of 1986 (the "Code"). (f) The Acquired Subsidiary has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. (g) Except as set forth in Section 3.13 of the TLC Disclosure Schedule, the Acquired Subsidiary is not a party to any Tax allocation or Tax sharing agreement. (h) The Acquired Subsidiary, in its current form as a limited liability company, has not been a member of an Affiliated Group (as such term is defined in the Code) filing a consolidated federal income Tax Return. Except as set forth in Section 3.13 of the TLC Disclosure Schedule, the Acquired Subsidiary has no liability for the Taxes of any Person under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

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(i) The Company is the sole owner of the Acquired Subsidiary. The Company has, in accordance with applicable Tax law, treated the Acquired Subsidiary as a division of the Company for federal and California income tax purposes at all times prior to and on the Closing Date. The Company has not filed any election to treat, for income or franchise Tax purposes, the Acquired Subsidiary as an entity that is considered separate from the Company. The Acquired Subsidiary has no responsibility to file income or California franchise Tax Returns and has no outstanding liability for income or California franchise Taxes. 3.14 Limitation of Warranties. Except as expressly provided in this Agreement, and notwithstanding any disclosure contained in the confidential memorandum supplied to Purchaser by the Company in connection with the solicitation of a purchaser for the TLC Entertainment Assets or made in the course of the Purchaser's due diligence investigation, no Seller makes any representation or warranty whatsoever, expressed or implied, including without limitation any implied warranty of merchantability or fitness for a particular purpose. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER The Purchaser represents and warrants to the Sellers that the statements contained in this Article IV are, to the knowledge of the Purchaser, true and correct. 4.1 Corporate Organization. The Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, with the corporate or similar power and authority to own and operate its business as presently conducted. The Purchaser has previously made available to the Company true and correct copies of its organizational documents. 4.2 Authorization; Validity and Effect of Agreement. The Purchaser has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Purchaser, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by its Board of Directors, and all other necessary corporate action on its part and no other corporate proceedings on its part are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Purchaser and, assuming that it has been duly authorized, executed and delivered by the Sellers, constitutes a legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

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4.3

No Conflict; Required Filings and Consents.

(a) Neither the execution and delivery of this Agreement nor the performance by the Purchaser of its obligations hereunder, nor the consummation of the transactions contemplated hereby, will (i) conflict with the provisions of the Purchaser's or USE's articles of incorporation or other organizational document; (ii) violate any statute, law, ordinance, rule or regulation, applicable to the Purchaser or USE or any of their respective properties or assets; or (iii) violate, breach, be in conflict with or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or permit the termination of any provision of, or result in the termination of, the acceleration of the maturity of, or the acceleration of the performance of any of any obligation under, or result in the creation or imposition of any Lien upon any properties, assets or business of the Purchaser or USE under, any note, bond, indenture, mortgage, deed of trust, lease, franchise, permit, authorization, license, contract, instrument or other agreement or commitment or any order, judgment or decree to which the Purchaser or USE is a party or by which either of them or any of their respective assets or properties is bound or encumbered except, in the case of clauses (ii) and (iii), for such violations, breaches, conflicts, defaults or other occurrences which, individually or in the aggregate, would not have a material adverse effect on the Purchaser or USE or on the Purchaser's ability to perform its covenants under this Agreement. (b) Except for the required notification to be made with the authorized broker pursuant to Article 4-1-32 of the General Regulations of the French Conseil des Marches Financiers in connection with the transfer of the USE Shares contemplated hereby (which notification will be made in a timely manner as required by law), no consent, approval or authorization of, permit from, or declaration, filing or registration with, any Governmental Entity in the United States or France or any other Person is required to be made or obtained by the Purchaser or USE in connection with the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, except where the failure to obtain such consent, approval, authorization, permit or declaration or to make such filing or registration would not, individually or in the aggregate, have a material adverse effect on its ability to perform its covenants under this Agreement. The Purchaser and USE have complied with all applicable French laws as they relate and apply to this transaction. 4.4 Transfer of the Shares. The Purchaser is the beneficial and record holder of the USE Shares and has legal and valid title to the USE Shares, free and clear of all Liens. The Purchaser has the lawful right to deliver the USE Shares to the Company as provided herein without the approval or consent of any Person, except such approvals and consents as have been lawfully obtained. The transfer of the USE Shares to the Company as contemplated hereby complies with all applicable foreign, federal, state and local laws and regulations of any Governmental Entity. The USE Shares, when transferred to the Company as contemplated hereby, will be freely tradable without any Lien or restriction of any kind other than as provided in the Lock Up Agreement to be executed by the Company as provided in Section 2.6(f) above.

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4.5 Acquisition of the LLC Interest for Investment; Restrictions on Resale. Purchaser is acquiring the LLC Interest for investment purposes only and not with a view to any distribution thereof; provided, however, that the parties acknowledge that the Purchaser may transfer and assign the LLC Interest to an Affiliate of the Purchaser, provided that such Affiliate agrees to acquire the LLC Interest for investment purposes only and not with a view to any distribution thereof. The Purchaser understands that the LLC Interest may not be directly or indirectly sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without (i) registration under the Securities Act of 1933 and (ii) compliance with foreign securities laws, in each case to the extent applicable, except pursuant to an exemption from such registration requirement or such foreign securities laws, in each case, to the extent applicable. 4.6 Investigation; No Additional Representations and Warranties.

(a) The Purchaser is an informed and sophisticated participant in the transactions contemplated hereby and has undertaken such investigation, and has been provided with and has evaluated such documents and information, as it has deemed necessary in connection with the execution, delivery and performance of this Agreement. (b) Notwithstanding anything to the contrary contained in this Agreement, it is the explicit intent of each party hereto that the Sellers are making no representations or warranties whatsoever, express or implied, beyond those expressly given in this Agreement, including, but not limited to, any implied warranty or representation as to condition, merchantability or suitability as to the TLC Entertainment Assets or any of the properties or assets of the business of the Acquired Subsidiaries and it is understood that the Purchaser takes the TLC Entertainment Assets AS IS AND WHERE IS. Except as expressly provided herein, the cost estimates, projections or other predictions contained or referred to in the materials that have been provided to the Purchaser or that have otherwise been disclosed to the Purchaser are not and shall not be deemed to be representations or warranties of the Sellers hereunder and that no Seller, nor any of their respective directors, officers, shareholders, employees, Affiliates, controlling persons, agents, advisors or representatives, makes or has made any representation or warranty, either express or implied, as to the accuracy or completeness of any of the information provided or made available to the Purchaser or its directors, officers, employees, Affiliates, controlling persons, agents or representatives. 4.7 Litigation. There is no Action instituted, pending or, to the knowledge of the Purchaser, threatened, in each case against the Purchaser or USE or any of their respective subsidiaries, which, individually or in the aggregate, directly or indirectly, would be reasonably likely to have a material adverse effect on its ability to perform its agreements and obligations under this Agreement, nor is there any outstanding judgment, decree or injunction, in each case against the Purchaser or USE or any of their respective subsidiaries, which has or would be reasonably likely to have, individually or in the aggregate, a material adverse effect on the Purchaser or USE or on the Purchaser's ability to perform its agreements and obligations under this Agreement. 18

4.8 Available Funds. The Purchaser currently has sufficient funds and/or financial resources to satisfy any obligations hereunder and in connection with the transactions contemplated hereby on the terms and conditions set forth herein. 4.9 Knowledge Regarding Representations; Satisfaction of Conditions. As of the Closing Date, the Purchaser is not aware of any inaccuracy or misstatement in, or breach of, any representation or warranty of the Sellers contained herein. 4.10 USE Filings. The publicly available reports and other filings made by USE through the date hereof (the "USE Filings") do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of USE included in the USE Filings were prepared in accordance with all applicable regulations and present fairly the consolidated financial position, results of operations and cash flows of USE and its consolidated subsidiaries as of the dates and for the periods indicated therein. ARTICLE V CERTAIN COVENANTS 5.1 Satisfaction of Conditions Precedent; Further Assurances. Each Seller shall use commercially reasonable efforts to cause the conditions precedent set forth in Section 2.4(c) and Section 2.4(d) to be satisfied on or before the Termination Time. Each party shall, from time to time, whether before, at or after the Closing Date, use commercially reasonable efforts to execute and deliver such further instruments of conveyance and transfer and take such other action as may be necessary to carry out the purposes and intents of this Agreement. Without limiting the generality of the foregoing, if, at any time following the Closing, any party receives any payment, correspondence or other property that is intended for or belongs to the other party, or to which the other party is legally entitled, then the party receiving such payment, correspondence or other property shall promptly pay over such payment or deliver such correspondence or other property to the other party.

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5.2 Delivery of the Purchased Inventory. As soon as practicable following the Closing, but in any event within ten (10) calendar days following the Closing, the Sellers shall deliver to the Purchaser a list of the inventory included in the TLC Entertainment Assets (the "Purchased Inventory") by stock keeping unit ("SKU"). As soon as practicable, but in any event within thirty (30) days following the Closing, the Purchaser shall deliver to the Sellers shipping instructions with respect to such inventory; provided, however, that, in lieu of providing shipping instructions, the Purchaser may authorize and direct the Sellers to destroy certain Purchased Inventory. Promptly following the receipt of such instructions, each Seller shall, and shall cause any Affiliate in possession of any Purchased Inventory to, ship or destroy the Purchased Inventory in its possession or control in accordance with the Purchaser's instructions. (The parties acknowledge that some of the Purchased Inventory may be held for Sellers or their Affiliates by one or more third parties who may also be willing to continue to hold such Inventory for the Purchaser's account, in which case, the Sellers shall, or shall cause their Affiliates to, instruct all such third parties to make appropriate changes in their records to reflect the change in the ownership of such Purchased Inventory.) The Purchaser shall pay or shall promptly reimburse the Sellers and their Affiliates for any and all costs, fees and other expenses incurred by them in shipping the Purchased Inventory or in destroying any Purchased Inventory as provided herein. To the extent that the Purchaser does not provide instructions to the Company to ship or to destroy any Purchased Inventory within thirty (30) days following the Closing Date, the Purchaser shall be responsible for and shall indemnify the Sellers and their Affiliates from any and all costs and expenses of warehousing such Purchased Inventory after the expiration of such thirty (30) day period and the Company shall have the right, upon ten (10) Business Days written notice to the Purchaser, to destroy any such Purchased Inventory at the Purchaser's expense unless, prior to the expiration of such ten (10) Business Day period, the Purchaser instructs the Sellers to ship the Purchased Inventory to the Purchaser or a third party at the Purchaser's expense. To the extent that any Purchased Inventory is held by an Affiliate of a Seller as of the Closing Date, the shipment of such Purchased Inventory by such Seller's Affiliate as contemplated hereby shall be deemed to have been effected to satisfy such Seller's obligation to deliver the Purchased Inventory to the Purchaser pursuant hereto, and shall be accounted for (as between such Seller and such Affiliate) in an appropriate manner under all applicable legal and accounting principles. 5.3 Excluded Assets. At any time prior to the Closing Date, the Company may cause the Acquired Subsidiary to transfer to the Company or an Affiliate of the Company any Excluded Assets that are held by the Acquired Subsidiary as of the date hereof. If at any time after the Closing Date, the Purchaser or the Company identifies any assets, including, without limitation, any intellectual property, that does not relate to the TLC Entertainment Business but that was owned by the Acquired Subsidiary at the time the Purchaser acquired the LLC Interest, the Purchaser shall take, and/or shall cause the Acquired Subsidiary and any Affiliate of the Purchaser to take, all such action as the Company may reasonably request, to transfer without consideration such asset to the Company or such Affiliate of the Company as the Company may request; provided, however, that the Company shall bear all costs and expenses of any action

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required to effect such transfer, including an appropriate charge for the time spent by employees of the Purchaser or any Affiliate of the Purchaser. 5.4 Cooperation Concerning Additional Intellectual Property. The parties acknowledge and agree that the Sellers or their Affiliates may hold patents, trademarks, trade names, service marks, copyrights (and applications for and registrations of such patents, trademarks, trade names, service marks and copyrights), computer software programs or applications, licenses of publicity or privacy rights and third party licenses that relate solely and exclusively to the TLC Entertainment Business but have not been included on the TLC Entertainment Assets by virtue of not being listed on the TLC Disclosure Schedule or having been distributed or transferred out of the Acquired Subsidiary prior to the Closing ("Additional TLC IP"). During the six (6) month period following the Closing, the Sellers shall work in good faith with the Purchaser to identify any Additional TLC IP that the Purchaser would like to acquire. If the Purchaser believes that an asset owned by a Seller constitutes Additional TLC IP but such Seller disagrees, the parties shall meet and confer and shall attempt to resolve such disagreement in good faith. To the extent that the Purchaser and any Seller agree that an asset owned by such Seller constitutes Additional TLC IP, such Seller shall take such action as the Purchaser may reasonably request (including, without limitation, the obtaining of any required third party consents) to transfer such Additional TLC IP to the Purchaser for no additional consideration; provided, however, that the Purchaser shall bear all costs and expenses of identifying any Additional TLC IP and of any action required to transfer such Additional TLC IP to the Purchaser, including an appropriate charge for the time spent by employees of any Seller in assisting Purchaser in such process and including any amounts required to be paid to obtain any requisite third party consents. The parties acknowledge and agree that, except to the extent a Seller may otherwise agree, the Additional TLC IP shall not include any Excluded Assets. 5.5 Execution of Assignments and Release of Liens. Within sixty (60) Business Days after the Closing, the Company shall execute and deliver to the Purchaser documents sufficient to evidence the full assignment to the Acquired Subsidiary of all of Sellers' right, title and interest in the U.S. and foreign trademarks and copyrights that are defined as TLC Intellectual Property Rights. To the extent that any such documents must be filed with any Governmental Authority, the Purchaser shall be responsible for effecting such filing and shall pay any and all filing fees and related expenses, including legal fees and expenses, of effecting such filing. Within ten (10) Business Days after the Closing, the Company shall deliver to the Purchaser all necessary releases or documentation for any Liens, attachments or encumbrances to the TLC Entertainment Assets. 5.6 TLC Entertainment Employees.

(a) On or before 5:00 p.m., P.S.T. on March 15, 2001 (the "Offer Date"), the Purchaser shall cause a direct or indirect, wholly owned U.S. subsidiary of USE (the "New Employer") to offer to employ certain of the persons named on Attachment No. 4 to Section 2.1(a) of the TLC Disclosure Schedule (the "TLC Entertainment Employees"), on terms and 21

conditions (including, without limitation, salary, bonus plans, benefits, titles, and reporting relationships) substantially equivalent to the terms and conditions on which such TLC Entertainment Employee is employed by the Company as of the Closing. To the extent that any benefits (pension and 401K) enjoyed by such TLC Entertainment Employee as of the Closing Date cannot be offered by the New Employer for any reason, then Purchaser shall cause the New Employer to provide such additional benefits or compensation as may be appropriate to approximately compensate for the loss of such benefit. Such offers shall include a written statement to each such TLC Entertainment Employee to the effect that the New Employer will assume responsibility for and will honor all of such TLC Entertainment Employee's rights to accrued vacation, accrued paid time off and other unpaid employee benefits (other than rights under the Company's equity participation plan). The Purchaser shall cause the New Employer to use commercially reasonable efforts to obtain, in consideration of the offer of employment, (i) a statement that such TLC Entertainment Employee is voluntarily resigning his or her position with the Company (or an Affiliate of the Company) to accept the offer of employment from the New Employer and (ii) a release from such TLC Entertainment Employee (the form of which shall be provided by the Company) releasing each Seller, each Affiliate of any Seller, Mattel and each affiliate of Mattel, and each officer, director and employee of each such entity, from any and all liabilities and obligations as an employer relating to the employment of such TLC Entertainment Employee prior to the Offer Date. (b) In the event that the Purchaser fails to cause the New Employer to make an offer of employment to any TLC Entertainment Employee prior to the Offer Date, the New Employer shall be deemed to have elected to not make an offer to such TLC Entertainment Employee, and the Company (or such other Seller that employs such TLC Entertainment Employee) may, in its sole discretion, terminate such TLC Entertainment Employee without cause no later than thirty (30) days after the Offer Date and the New Employer and the Purchaser shall be responsible for, and shall indemnify such Seller or such Affiliate from, any and all of such Seller's or such Affiliate's liabilities and obligations as an employer with respect to any such TLC Entertainment Employee who is deemed to be terminated under the terms of this Section 5.6(b). With respect to any TLC Entertainment Employee terminated by Company or its Affiliates more than thirty (30) days after the Offer Date, the Company shall be responsible for, and shall indemnify Purchaser and New Employer against, any and all of Purchaser's or such New Employer's liabilities and obligations with respect to any such TLC Entertainment Employee who is terminated after such thirty (30) days. (c) All TLC Entertainment Employees who accept the New Employer's offer of employment shall commence employment with the New Employer effective as of the first calendar day following the Offer Date and the New Employer shall thereafter be responsible for, and the Purchaser shall, and shall cause the New Employer to, indemnify the Sellers and their Affiliates from, any and all obligations to such TLC Entertainment Employees, including, without limitation, any and all accrued vacation and accrued paid time off, other than any obligations to such persons under the Company's equity participation plan, which obligations shall remain obligations of the Company. In connection with the employment by the New 22

Employer of any TLC Entertainment Employee who is a party to an assignable employment agreement with any Seller or any Affiliate of any Seller, upon the request of such Seller or Affiliate, the Purchaser shall cause the New Employer to work in good faith with such Seller or Affiliate to attempt to assign such employment agreement to the New Employer rather than to terminate such employment agreement. In the event that any TLC Entertainment Employee is hired by the New Employer and is subsequently terminated by the New Employer, the New Employer shall be responsible for, and the New Employer and the Purchaser shall indemnify the Sellers and their Affiliates against, any and all unemployment benefits, COBRA, and severance costs, including severance pay, employee benefits and similar payments and obligations, owed to any such terminated employee. (d) (i) In the event that the New Employer makes an offer of employment on or prior to the Offer Date to a TLC Entertainment Employee, and such TLC Entertainment Employee does not accept the New Employer's offer of employment, the Company shall have the right to review the offer of employment made by the New Employer to such TLC Entertainment Employee, and if, in the Company's commercially reasonable judgment, the terms and conditions of the offer made to such TLC Entertainment Employee by the New Employer is not substantially equivalent to the terms and conditions of such TLC Entertainment Employee's terms and conditions of employment prior to the Offer Date, the Company (or such other Seller or Affiliate of such Seller that employs such TLC Entertainment Employee) may, in its sole discretion, terminate such TLC Entertainment Employee without cause no later than thirty (30) days after the Offer Date and the New Employer and the Purchaser shall be responsible for, and shall indemnify such Seller or such Affiliate against, any and all of such Seller's or such Affiliate's liabilities and obligations as an employer with respect to any such TLC Entertainment Employee who is deemed to be terminated under the terms of this Section 5.6(d)(i). Any relocation or indicated potential relocation by the New Employer of any TLC Entertainment Employee to a work facility not located within the counties of Marin, San Francisco, and/or Alameda shall be deemed to be a non-comparable offer. With respect to any TLC Entertainment Employee terminated by Company or its Affiliates more than thirty (30) days after the Offer Date, the Company shall be responsible for, and shall indemnify Purchaser and/or New Employer against, any and all of Purchaser's or such New Employer's liabilities and obligations with respect to any such TLC Entertainment Employee who is terminated after such thirty (30) days. To the extent that the TLC Entertainment Employee to whom the offer is made by the New Employer is asked to significantly change his or her commute to the New Employer's work facility, the New Employer shall reasonably provide additional compensation in the offer of employment to compensate the TLC Entertainment Employee for the additional burden of such change. (ii) In the event that the New Employer makes an offer of employment on or prior to the Offer Date to a TLC Entertainment Employee, and such TLC Entertainment Employee does not accept the New Employer's offer of employment, and if after review of the 23

offer as set forth above, the Company determines that such offer of employment made by the New Employer to such TLC Entertainment Employee is substantially equivalent to the terms and conditions of such TLC Entertainment Employee's terms and conditions of employment prior to the Offer Date, the Company (or such other Seller or Affiliate of such Seller that employs such TLC Entertainment Employee) may, in its sole discretion, terminate such TLC Entertainment Employee without cause or reassign such TLC Entertainment Employee to other duties for the Company or another Seller or an Affiliate of another Seller and the Company shall be responsible for, and shall indemnify Purchaser and/or New Employer against, any and all of Purchaser's or such New Employer's liabilities and obligations with respect to any such TLC Entertainment Employee who is deemed to be terminated or reassigned under the terms of this Section 5.6(d)(ii). The Purchaser covenants and agrees that, for a period of one year after the Offer Date, it will not, and it will not permit any of its Affiliates to, employ any TLC Entertainment Employee who does not accept the New Employer's offer of employment without the Company's prior written consent, which consent shall not be withheld if the Company (or an Affiliate of the Company) is reimbursed by the New Employer or such TLC Entertainment Employee for any and all severance pay and other consideration paid to such TLC Entertainment Employee in connection with the termination of his or her employment by the Company (or an Affiliate of the Company). (e) Purchaser shall, for the period of time beginning on the Closing Date and ending on the close of business on the Offer Date, indemnify the Sellers and their Affiliates against any and all employment-related costs incurred by any Seller and/or any Affiliate of any Seller with respect to the TLC Entertainment Employees. Purchaser's obligation under this Section 5.6(e) shall include, but not be limited to, any and all unemployment benefits, COBRA or workers' compensation benefits, liabilities or obligations, and any other employee benefits or similar payments and/or obligations (other than any such obligations related to the Company's equity participation plan) that may arise and become owed by any Seller or any Affiliate of any Seller as an employer to any TLC Entertainment Employee for the period described herein. In addition to the foregoing, the Company shall provide to the Purchaser a detailed listing of all the TLC Entertainment Employees with each such TLC Entertainment Employees' total cost of payroll and other benefits with respect to the period from the Closing Date through the Offer Date, and, on or prior to the close of business P.S.T. of that date which is three (3) Business Days in advance of the Offer Date, the Purchaser shall pay to the Company, via wire transfer to such accounts as the Company may designate, all of the outstanding payroll and benefits obligations (other than any such obligations related to the Company's equity participation plan) of each Seller and of each Seller's Affiliates for each of the TLC Entertainment Employees with respect to the period from the Closing Date through the Offer Date. (f) The Sellers shall indemnify and hold the Purchaser and its Affiliates harmless from any and all obligations under applicable law to any former employee of any nonU.S. Affiliate of the Company resulting from the termination of such employee's employment by such non-U.S. Affiliate following the Closing.

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5.7 Temporary Contract Employees. As of the close of business on the Business Day prior to the Closing, each Seller shall terminate the engagement of any and all temporary contract employees engaged by such Seller to provide services with respect to the TLC Entertainment Business. The New Employer shall be responsible for arranging with such agencies and services to hire any or all of such temporary contract employees as and when the New Employer may deem appropriate, in its sole discretion. 5.8 Certain Consents. The Company and the Purchaser shall use reasonable efforts (which shall not include the payment of money by any Seller or any Affiliate of any Seller) to obtain all consents and approvals required for the assignment to the Purchaser or the Acquired Subsidiary of the Contracts to be Assigned. To the extent that any such consent or approval has not been obtained with respect to any Contract to be Assigned at any time, Sellers shall, to the extent reasonably practicable, provide the Purchaser or an Affiliate of the Purchaser the economic benefit (taking into account costs and benefits with respect to Taxes) of such Contract to the same extent as if the Sellers had not been precluded from assigning such Contract to the Purchaser or its Affiliate, and the Purchaser shall, or shall cause an Affiliate of the Purchaser to, perform all obligations and assume all liabilities and obligations under the TLC Contracts. Nothing in this Agreement shall be construed as an attempt to assign any Contract to be Assigned or any right thereto that by the terms of such Contract is not assignable without the consent of the other party to such contract or if an assignment or transfer or attempt to make such an assignment or transfer without the consent of a third party or a waiver of a third party's rights would constitute a breach or violation thereof or adversely affect the rights of any Seller, the Acquired Subsidiary or the Purchaser thereunder or thereto. Any transfer of any Contract to be Assigned described in the preceding sentence shall be made subject to such consent or waiver being obtained. If and when such consents and approvals are obtained, the transfer of the applicable Contract to be Assigned shall be effected in accordance with the terms of this Agreement. For U.S. federal income tax purposes, the parties shall treat the Contracts to be Assigned as owned, from and after the Closing, by the Purchaser or an Affiliate of the Purchaser. 5.9 Certain Litigation and Proceedings. The Purchaser shall, or shall cause one or more of its Affiliates to, be substituted in all respects, effective as of the Closing, for the Sellers or their Affiliates named in the litigation or claims that are set forth in Section 3.6 of the TLC Disclosure Schedule and shall indemnify parties from any and all costs and obligations arising therefrom or relating thereto. To the extent that the Purchaser or one of its Affiliates is not able to substitute in any such litigation for any such party for any reason, the Purchaser shall, or shall cause one or more of its Affiliates to, defend such litigation or claim in such party's name and shall bear all costs of such litigation and such party shall cooperate with the Purchaser to permit the Purchaser or its Affiliate to defend or settle such litigation in such party' name. 5.10 Termination of Intercompany Accounts. On or prior to the Closing Date, all intercompany accounts between the Acquired Subsidiary, on the one hand, and any Seller, or any Affiliate of any Seller, on the other hand, shall be eliminated, without any payment of funds in connection therewith. 25

5.11 TLC Trademarks and Logos. The parties acknowledge and agree that all finished goods inventory sold, transferred or conveyed under the terms of this Agreement shall be deemed to be acquired under the "first sale doctrine" as if Purchaser were a distributor of such inventory. Subject to the following limited, non-exclusive licenses, the parties agree that the Purchaser is not purchasing, acquiring or otherwise obtaining any right, title or interest in any of the Sellers' trademarks, logos, trade names, or service marks, including, without limitation, those listed in paragraph 6 of Section 2.1(b) of the TLC Disclosure Schedule (collectively, the "TLC Trademarks and Logos"). Seller hereby grants to the Purchaser and its Affiliates, a nonexclusive, worldwide, fully-paid up license to use the TLC Trademarks and Logos embedded in the existing software programs included in the TLC Entertainment Assets for up to eighteen (18) months from the Closing Date; provided, however, that the Purchaser and its Affiliates shall use commercially reasonable efforts to terminate such use of the TLC Trademarks and Logos as soon as practicable and shall not take any action that would extend the period of such use, even if such extended period is within the license period. Seller hereby grants to the Purchaser and its Affiliates, a non-exclusive, worldwide, fully-paid up license to use the TLC Trademarks and Logos for up to three (3) months from the Closing Date on, in association with and in conjunction with, existing inventories of software packaging, package inserts, jewel case inserts, disk art, marketing materials, websites and office materials (such office materials to include, for example, but not be limited to, business cards, stationery and facsimile cover sheets). The foregoing three (3) month license shall not include the right to produce any additional inventories bearing the TLC Trademarks and Logos beyond the inventories in existence as of the Closing Date. The Purchaser agrees (and will cause any Affiliate to agree in writing upon request) that the Sellers own all right, title and interest in the TLC Trademarks and Logos and further agrees never to challenge or to permit any Affiliate to challenge the validity of any of TLC's rights therein. The Purchaser agrees not to use or to permit any Affiliate to use any identifying logo or service mark confusingly similar to the TLC Trademarks and Logos. 5.12 Outbound License to the Sellers. The Purchaser hereby grants (and shall cause USE and any other Affiliate of the Purchaser to grant) to the Sellers, and to each of them, a nonexclusive, worldwide, fully-paid up license to make, use and sell products incorporating any and all TLC Intellectual Property Rights to the extent that such license is required to permit Sellers and their Affiliates to (i) continue to honor their obligations under any Contracts included in the Excluded Assets and/or (ii) continue to maintain a price list reflecting the Retained SKU's. In consideration of the granting of such license, Sellers hereby covenant with the Purchaser to perform their respective obligations under any such Contract. 5.13 Sublicense of Rights Granted by Mattel. The parties acknowledge and agree that all finished goods inventory which contains the Mattel Trademarks and Logos (as defined in the TLC Disclosure Schedule) or Mattel intellectual property, that are sold, transferred or conveyed under the terms of this Agreement shall be deemed to be acquired under the "first sale doctrine" as if Purchaser were a distributor of such inventory. Promptly following the Closing, the Company shall use commercially reasonable efforts to obtain from Mattel the right to sublicense 26

to the Purchaser and its Affiliates the right to use such intellectual property owned by Mattel as shall be necessary or useful for the Purchaser in connection with the Purchaser's ownership of the TLC Entertainment Assets and, to the extent that the Company obtains such right to sublicense from Mattel, the Company shall sublicense such rights to the Purchaser and its Affiliates as Mattel may permit; provided, however, that such sublicense shall be limited in all respects to those rights already in possession of the Company pursuant to its existing agreements with Mattel, and nothing in this Agreement shall be construed to obligate the Company to provide to the Purchaser and its Affiliates any rights other than those already in the possession of the Company. 5.14 Public Announcements; Confidentiality. Except as otherwise required by law or if required in order to comply with any listing agreement with, or the rules or regulations of, any securities exchange on which securities of the Seller, the Purchaser or any of their respective Affiliates are listed or traded, the Purchaser and Company will consult with the other and obtain the written consent of the other before issuing any press releases or any public statements with respect to this Agreement and the transactions contemplated hereby. The Purchaser does not anticipate that it will be required to make a copy of this Agreement or any schedule or exhibit hereto publicly available or to otherwise publicly disclose the terms of this Agreement by any law, listing agreement, rule or regulation. In the event that the Purchaser or any Affiliate of the Purchaser determines at any time that any such disclosure is required by any law, listing agreement, rule or regulation, the Purchaser will work with the Company in good faith to disclose any commercially sensitive information concerning the terms of this Agreement in a manner reasonably acceptable to the Company that complies with such law, listing agreement, rule or regulation. Any information provided to the Purchaser or its representatives pursuant to this Agreement shall be held by such Person in accordance with, and shall be subject to the terms of, the Confidentiality Agreements, and each of the Sellers and the Purchaser shall comply with the Confidentiality Agreements as if it were a party thereto. Notwithstanding the foregoing, each of the parties hereto will have the right to disclose the terms of this Agreement to their respective statutory auditors in order to comply with any accounting regulations. 5.15 Product Launch Costs. Section 5.15 of the TLC Disclosure Schedule sets forth in reasonable detail the expenses that the Company anticipates that it has paid or incurred or will pay or incur in connection with the launch of the Myst 3 and Moon Project products (the "New Product Launches"), including a complete and accurate itemized list of all expenses related to the New Product Launches that have been (or will be) paid by the Company prior to the Closing Date (the "Pre-Closing Expenses") as well as all amounts that the Company has committed to pay or plans to pay in connection with the New Product Launches. At the Closing, the Purchaser shall pay to the Company the sum of Ninety Eight Thousand Eight Hundred Eighty Six Dollars ($98,886) (i.e., the $170,713 of Pre-Closing Expenses shown on Schedule 5.15 minus the $71,827 by which the total Launch Costs exceed $1,800,000), and the accrued liabilities relating to the New Product Launches that are shown on Schedule 5.15 shall be deemed "Assumed Liabilities" hereunder. The Purchaser shall be responsible for all further expenses related to the

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New Product Launches and no Seller shall have any further obligation to bear any expense in connection therewith. 5.16 Tax Matters.

(a) Sellers shall treat the sale of the Acquired Subsidiary and the TLC Entertainment Assets as a sale of assets for federal and California income and franchise tax purposes. The Sellers and the Purchaser shall, as promptly as may be practicable, and in any event within sixty (60) days following the Closing, cooperate in a manner consistent with Section 1060 of the Code as to the allocation of the Purchase Price for Tax purposes among the TLC Entertainment Assets, the LLC Interest and the Assumed Liabilities. In connection with such allocation, the parties agree that the amount of the purchase price to be allocated to the TLC Entertainment Assets and Assumed Liabilities acquired from Broderbund shall be zero dollars ($0.00). Each party shall disclose its respective Form 8594 and any other Tax-related filings to the other party in accordance with the mutual cooperation as contemplated herein. (b) All Taxes (as defined below) of the Acquired Subsidiary for taxable periods beginning before the Closing Date and ending on or after the Closing Date will be allocable between the partial taxable period on the Closing Date and the partial period beginning on the day after the Closing Date and ending at any time thereafter by means of closing the books and records for the Acquired Subsidiary on the Closing Date, provided that any such Taxes that are calculated on an annual basis shall be based upon the assessment in place as of the Closing Date and shall be allocated between the partial taxable period ending on the Closing Date and the partial taxable period beginning on the day after the Closing Date in proportion to the number of days in each such partial taxable period. Taxes of the Acquired Subsidiary allocated to the partial taxable period ending on the Closing Date shall be paid by Sellers. Taxes of the Acquired Subsidiary allocable to the partial taxable periods beginning on the day after the Closing Date and ending at any time thereafter are the responsibility of the Purchaser. Any refunds of Taxes received by the Acquired Subsidiary for periods (including partial periods) ending on the Closing Date shall be paid over to the Sellers if and when received. (c) The foregoing notwithstanding, the Purchaser shall be responsible for and shall indemnify and hold the Sellers and their Affiliates harmless from (i) any and all foreign Taxes (other than Taxes based on income), payable as a result of or in connection with the transfer of the TLC Entertainment Assets or the LLC Interest as contemplated by this Agreement and (ii) any Taxes related to or resulting from the failure by any Seller to withhold Taxes from payments made to developers in connection with the TLC Entertainment Business. (d) Any agreement between the Acquired Subsidiary and any Seller regarding allocation or payment of Taxes or amounts in lieu of Taxes shall be deemed terminated at and as of the Closing Date.

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(e) The Purchaser shall keep and, except to the extent books and records have been transferred to the Purchaser, the Sellers shall keep, or require any successor to keep, all books and records required to be maintained by the Acquired Subsidiary under the laws of any applicable Governmental Authority until at least December 31, 2006 and thereafter, each party shall first notify the other party of its intent to destroy such books and records and give such other party the opportunity to take the books and records before they are destroyed. Each party agrees to furnish or cause to be furnished to the other party, upon request, as promptly as practicable, such information and assistance (including access to books and records) relating to the Acquired Subsidiary as is reasonably necessary for the preparation of any Tax Return for Taxes, claims for refund or audit or prosecution or defense of any claim, suit or proceeding relating to any proposed adjustment of Taxes paid. 5.17 Transfer of TLC Entertainment Assets to a U.S. Subsidiary of USE. Within ten (10) Business Days of the Closing Date, Purchaser shall transfer, assign and convey all of the Purchaser's right, title, interest to this Agreement, including, but not limited to, the TLC Entertainment Assets and the Assumed Liabilities, and all rights and obligations under this Agreement and the Related Agreements, to a direct or indirect, wholly owned U.S. subsidiary of USE pursuant to an appropriate conveyancing instrument (which shall be substantially similar to Exhibit F unless otherwise agreed in writing by the Company), and such subsidiary shall assume all of the Purchaser's obligations under this Agreement pursuant to such instrument. Such transfer, assignment, conveyance and assumption shall not relieve the Purchaser of any of its obligations under this Agreement or any Related Agreement, which shall remain in full force and effect thereafter. 5.18 Amendment of Certificate of Formation. Within thirty (30) days of Closing, Purchaser shall cause the Acquired Subsidiary to file with the Secretary of State of the State of Delaware a Certificate of Amendment of the Acquired Subsidiary's Certificate of Formation effecting a change of the Acquired Subsidiary's name to some name other than "TLC Entertainment Properties LLC" or any name similar thereto, including, without limitation, any name using any form of "The Learning Company," "TLC" or any derivation thereof. 5.19 Compliance With Law. Each Seller and the Purchaser shall comply with all applicable laws and regulations in connection with the consummation of the transactions contemplated hereby, including without limitation, all French laws and regulations applicable to the ownership and transfer or sale of the USE Shares and all employment laws and regulations of Ireland, the United Kingdom, France, Germany and the Netherlands. Without limiting the generality of the foregoing, no later than ten (10) Business Days of the Closing, the Purchaser shall also cause an attestation d'inscription en compte to be delivered to the Company evidencing the book entry transfer of the USE Shares from the Purchaser to the Company. 5.20 Non-Solicitation of Employees. For a period of one year from the date hereof, the Purchaser shall not, and shall not permit any Affiliate or any of their respective employees or agents to, directly or indirectly, divert, solicit, take away or employ any consultant, sales 29

representative or other employee or agent of any Seller, or otherwise interfere with or disturb the relationship existing between any Seller and any of such Seller's consultants, sales representatives or other employees or agents. 5.21 Compliance with Contracts. From and after the Closing, the Purchaser shall, and to the extent appropriate shall cause each of its Affiliates to, comply with all of the terms and conditions of the Contracts listed in Section 3.9(a) or Section 3.9(b) of the TLC Disclosure Schedule and shall not, and shall not permit any of its Affiliates to, interfere with, disturb, or infringe upon any exclusivity provision in any such Contract. The Company shall not renew or extend any such Contract listed in Section 3.9(b) of the TLC Disclosure Schedule, or permit any such Contract to automatically renew, without the Purchaser's written consent unless such Contract is amended to eliminate any provisions that relate to any TLC Entertainment Assets. No Seller may assign any or all of its rights or obligations under any Contract listed in Section 3.9(b) to any Person unless (i) such contract is amended in connection with such assignment to terminate those aspects of such Contract that relate to the TLC Entertainment Business, or (ii) the Purchaser has consented to such assignment, which consent shall not be unreasonably withheld; provided, however, that the Purchaser shall have the absolute right to withhold its consent for any proposed assignment to any Person engaged in a business that is competitive with the Purchaser. To the extent that the Company has the right to terminate any Contract listed in Section 3.9(a) without cost, penalty or other adverse consequences to any Seller or any Affiliate of any Seller, the Company shall terminate such Contract as soon as practicable following the Closing, subject to the approval of Purchaser, not to be unreasonably withheld. To the extent that the Company has the right to amend any Contract listed in Section 3.9(b) to terminate those aspects of such Contract that relate to the TLC Entertainment Assets without cost, penalty or other adverse consequences to any Seller or any Affiliate of any Seller, the Company shall so amend such Contract as soon as practicable following the Closing. 5.22 Satisfaction of Assumed and Excluded Liabilities. From and after the Closing Date, (i) Sellers shall perform and satisfy all obligations and liabilities that constitute Excluded Liabilities and (ii) the Purchaser shall, or shall cause an Affiliate to, perform and satisfy all obligations and liabilities that constitute Assumed Liabilities. 5.23 Inventory in the Channel. Promptly following the Closing, the Purchaser and the Company shall each send written notice to all customers of the TLC Entertainment Business announcing the sale of the TLC Entertainment Assets. Each such notice shall be subject to prior review and approval by the other party, which approval shall not be unreasonably withheld or delayed. Purchaser and the Company acknowledge and agree (i) with respect to the Retained SKU's (as defined below), requests for returns authorization, price protection arrangements and application of credit memos will be the responsibility of and handled by the Sellers, (ii) all payments related to products shipped by a Seller or an Affiliate of a Seller prior to the Closing Date should be made to such Seller or Affiliate of a Seller and all returns authorization, price protection arrangements and credit memos that have been issued by such Seller or an Affiliate of a Seller prior to Closing will be the responsibility of and handled by the Seller or its Affiliate, 30

(iii) with respect to certain products to be selected by the Purchaser following the Closing Date ("Purchaser's Price List Products"), requests for returns and price protection arrangements will be the responsibility of and handled by an Affiliate of the Purchaser and (iv) all payments related to products shipped by an Affiliate of the Purchaser after the Closing Date should be made to such Affiliate. As used in this Section 5.23, the term "Retained SKU's" shall mean those SKU's acquired by the Purchaser other than the Purchaser's Price List Products. The Purchaser hereby grants to the Sellers and their Affiliates the right to (i) include such portion of the Retained SKU's as the Sellers may elect on their price list for a period of nine (9) months following the Closing Date. The Purchaser shall use commercially reasonable efforts, consistent with the Purchaser's sales policies, to respond to customer requests for returns authorizations and price protection arrangements with respect to Purchaser's Price List Products. During the nine (9) month period following the Closing Date, the Purchaser shall provide the Company with a copy of its current price list for any Purchaser's Price List Products and with such channel inventory reports and other information concerning customer requests for materials return authorizations as the Company may reasonably request in connection with its accounts receivable collections efforts. Seller shall provide Purchaser or its Affiliate with the Retained SKU's that will appear on Seller's price list within ten (10) days following the Closing Date. Seller shall not add any Retained SKU's to Seller's price list after the Retained SKU's are approved by Purchaser. Seller understands and agrees that any Retained SKU's that are not currently on Seller's or its Affiliates price list(s) shall remain permanently off of Seller's or its Affiliates' price list(s). As Seller deletes any Retained SKU's from its price list before the end of the nine (9) month period following the Closing Date, Purchaser shall be free to determine all actions with respect to said Retained SKU's in Purchaser's sole discretion, and at the end of said nine (9) month period all of Seller's rights to keep any and all of the Retained SKU's on Seller's price list shall lapse, terminate and automatically revert to Purchaser. Subject to Purchaser or its Affiliate's approval of the TLC Entertainment Products included in the software bundles described below, Purchaser hereby grants Seller the right to use the TLC Intellectual Property Rights to complete the manufacture and sale of products on hand or ordered as of the Closing Date, for inclusion in software bundles to be sold in Europe through June 30, 2001, provided that: (i) Seller pays Purchaser or its Affiliate a fifteen percent (15%) royalty of their pro-rata share of the revenues received from the post Closing sales of such software bundles for the TLC Entertainment Assets that are included in such software bundles upon receipt of such revenues; (ii) Seller shall not dump such software bundles in the European market; (iii) Seller will work with Purchaser to dispose of any excess inventory of such software bundles in an orderly and systematic way in the European market; and (iv) this limited license shall expire upon December 31, 2001, whereupon at Purchaser's or its Affiliate's requests Seller shall destroy such software bundles or ship them to Purchaser's Affiliate at Seller's cost. 5.24 Leased Equipment. A substantial portion of the furniture and equipment used in the TLC Entertainment Business as of the date hereof is leased. (All such leased furniture and equipment is collectively referred to as the "Leased Equipment"). No later than two (2) weeks following the Closing, the Purchaser and the Company shall meet and divide the Leased Equipment between them as follows: (i) Purchaser or its Affiliate shall have the right to choose 31

first, but only may choose Leased Equipment up to fifty percent (50%) of the value of the total Leased Equipment value; (ii) Seller shall have the right to choose second from the remaining Leased Equipment; and (iii) if there is remaining Leased Equipment then the parties shall choose by by alternately selecting items of Leased Equipment; provided, however, if there are any critical product development data, software, materials or other items on the Leased Equipment kept by Seller that constitute TLC Entertainment Assets, then Seller shall download or transfer such items to Purchaser's or its Affiliate's equipment in a timely manner but at Purchaser's or its Affiliate's cost. Upon such allocation, the Leased Equipment allocated to the Purchaser (the "Purchaser Equipment") shall be deemed subleased to the Purchaser by the Company (or such other Seller as may be a party to the respective equipment leases) for a sublease period beginning effective as of the Closing Date and ending on the second anniversary of the Closing Date. Such sublease shall be governed by terms and conditions (other than payment terms) consistent with the relevant terms and conditions of the equipment lease(s) relating to the Purchaser Equipment. Although the parties are aware that the sublease arrangement contemplated hereby is not expressly authorized by the terms of the respective equipment leases relating to the Leased Equipment, it is the Company's intention to work with the various equipment lessors following the Closing to (i) terminate the relevant equipment leases as to the Purchaser Equipment by purchasing the Purchaser Equipment, or (ii) obtain the consent of the equipment lessors to the sublease arrangement contemplated by this Agreement. In full payment for the sublease contemplated by this Agreement, the Purchaser shall pay to the Company the sum of Three Hundred Sixty Thousand Dollars ($360,000) at the Closing. The Company covenants and agrees to make all lease payments related to the Leased Equipment during the term of the sublease provided for herein, except as may be approved by Purchaser. At the expiration of the two (2) year sublease term contemplated herein, the Company shall deliver title, free and clear of all claims, Liens and/or encumbrances, to the Leased Equipment; provided, however, that the Purchaser shall indemnify the Company against any loss or damage (outside of normal wear and tear) to the Purchaser Equipment as a result of the use of the Purchaser Equipment by the Purchaser, and such indemnification obligation shall not be limited as set forth in Section 6.3. The Company shall indemnify the Purchaser against any and all cost or liability that may arise as a result from the subleasing of the Purchaser Equipment as provided herein without the consent of the primary lessor or from Company's failure to make lease payments, and such indemnification obligation shall not be limited as set forth in Section 6.2 of this Agreement. ARTICLE VI SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION 6.1 Survival of Representations and Warranties. With the exception of the representations and warranties of the Sellers included in Section 3.13 (Taxes) and the representations and warranties of the Purchaser included in Section 4.4 (Transfer of Shares), the representations and warranties made by the parties hereunder shall survive the Closing for a period of eleven (11) months thereafter, and no party shall have any liability for the breach of any representation or warranty hereunder except to the extent that a claim with respect thereto is brought in the manner provided herein prior to the expiration of such eleven (11) month period. 32

The representations and warranties of the Purchaser included in Sections 3.13 (Taxes) shall survive the Closing for a period of one hundred eighty (180) days after the expiration of the applicable statute of limitations (including any extension or waivers thereof) and the representations and warranties of the Purchaser set forth in Section 4.4 (Transfer of Shares) shall survive the Closing without time limit of any kind. 6.2 Indemnification by the Sellers.

(a) Subject to the limitations set forth in clause (b) of this Section 6.2 below, Sellers shall indemnify and hold the Purchaser and its Affiliates (the "Purchaser Indemnified Parties") harmless from and against any and all losses, damages, liabilities, Taxes, sanctions, penalties, costs or expenses (including, without limitation, reasonable attorneys' fees and expenses) incurred by the Purchaser Indemnified Parties (collectively, "Purchaser Losses"), sustained as a result of or related to (i) any breach by any Seller of any representation or warranty included in this Agreement or in any Related Agreement, (ii) any breach by any Seller of any covenant included in this Agreement or in any Related Agreement (including, without limitation, the separate indemnification obligations set forth in Sections 5.6(a), 5.9 and 7.6), and (iii) any Excluded Liability. (b) Notwithstanding the provisions of Section 6.2(a), Sellers shall not be obligated to indemnify the Purchaser Indemnified Parties for any breach of the representations and warranties contained in Section 3.13 (Taxes) or Section 3.11(c) or for any breach of the covenants of the Sellers in Section 5.16 (Tax Matters) unless and until the Purchaser Losses resulting therefrom or related thereto exceed, in the aggregate, One Million Dollars ($1,000,000), after which the Sellers shall be obligated to indemnify the Purchaser Indemnified Parties (i) for any breaches of the representations and warranties contained in Section 3.13 (Taxes) or for any breach of the covenants of the Sellers in Section 5.16 (Tax Matters) without limit and (ii) for any breach of the representations and warranties contained in Section 3.11(c), up to Ten Million Dollars ($10,000,000) in such Purchaser Losses. (c) Except as otherwise provided in the foregoing clause (b) of this Section 6.2 (which shall be the exclusive provisions with respect to the limitations on Sellers' indemnification obligations with respect to the matters addressed therein), Sellers shall not be obligated to indemnify the Purchaser Indemnified Parties for any breach of any representations and warranties included in this Agreement to the extent that the aggregate amount of Purchaser Losses resulting therefrom or related thereto exceeds Two Million Five Hundred Thousand Dollars ($2,500,000). 6.3 Indemnification by the Purchaser.

(a) Subject to the limitations set forth in Section 6.3 below, the Purchaser shall indemnify, defend and hold the Sellers and their officers, directors, members, employees, legal representatives, agents, successors and assigns (the "Seller Indemnified Parties") harmless 33

from and against any and all losses, damages, liabilities, Taxes, sanctions, penalties, costs or expenses (including, without limitation, reasonable attorneys' fees and expenses) incurred by the Seller Indemnified Parties (collectively, "Seller Losses"), sustained as a result of or related to (i) any breach by the Purchaser of any representation or warranty included in this Agreement or in any Related Agreement, (ii) any breach by the Purchaser of any covenant included in this Agreement or in any Related Agreement (including, without limitation, the separate indemnification obligations set forth in Sections 5.6(b), 5.9, 5.16(c) and 7.6), or (iii) any Assumed Liability. (b) The foregoing notwithstanding, the Purchaser shall not be obligated to indemnify the Seller Indemnified Parties for any breach of any representation or warranty included in this Agreement to the extent that the aggregate amount of Sellers Losses resulting therefrom or related thereto exceeds Two Million Five Hundred Thousand Dollars ($2,500,000); provided, however that the foregoing limitations shall not apply to the representations and warranties of the Purchaser set forth in Section 4.4 (Transfer of Shares). 6.4 Indemnification Claims.

(a) Notice of Direct Claims. If an Indemnified Party (as defined hereinafter) becomes aware of facts or circumstances establishing that an Indemnified Party has experienced or incurred any damages or losses under this Agreement or may experience or incur such damages or losses which will give rise to any claim for Purchaser Losses or Seller Losses or a right of indemnification under this Agreement, then such Indemnified Party must give written notice (an "Indemnification Notice") to the Indemnifying Party (as defined hereinafter) of such claim (a "Claim") as soon as reasonably practicable but in no event more than thirty (30) days after the Indemnified Party has received written notice of such Claims (provided that failure to give such notice shall not limit the Indemnifying Party's indemnification obligation hereunder except to the extent that the delay in giving, or failure to give, the notice adversely affects the Indemnifying Party's ability to defend against the Claim). To the extent reasonably practicable, the Indemnification Notice will describe the nature, basis and amount of the Indemnification Claim and include any relevant supporting documentation. If the Indemnifying Party contests the propriety of a Claim described on the Indemnification Notice and/or the amount of damages alleged to be associated with such Claim, then the Indemnifying Party will deliver to the Indemnified Party within thirty (30) days after receipt of an Indemnification Notice, a written objection stating the objections the Indemnifying Party has with respect to the indemnification Claims contained in the Indemnification Notice. Any undisputed indemnification Claims contained in the Indemnification Notice shall be deemed to be final and binding upon the Indemnifying Party(ies) and shall constitute a permitted indemnification Claim. If any disputed issues ultimately are resolved and it is determined that all or any portion of an indemnification Claim is in fact subject to indemnification pursuant to this Agreement, such indemnification Claim or portion thereof shall be final and binding upon the Indemnifying Party(ies) and shall constitute a permitted indemnification Claim. The Indemnifying Party shall pay to the Indemnified Party the Purchaser Losses or Seller Losses, as applicable, within sixty (60) days 34

after such Claim is determined to be a permitted indemnification Claim. As used herein, "Indemnified Party" shall mean a party (either a Seller Indemnified Party or a Purchaser Indemnified Party) entitled to indemnification pursuant to the terms and conditions of this Agreement and this Article 6. As used herein, "Indemnifying Party" shall mean a party against whom an Indemnified Party is entitled to indemnification from pursuant to the terms and conditions of this Agreement and this Article 6. (b) Third Party Claims. The Indemnified Party against whom a third party Claim is made or brought shall give the Indemnifying Party an opportunity to defend such Claim, at the Indemnifying Party's own expense and with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party, provided that such Indemnified Party at all times also shall have the right to participate fully in the defense at its own expense. If the Indemnifying Party elects not to assume the defense of such Claim (or if such Indemnifying Party shall be deemed to have waived its right to defend such Claim), the Indemnified Party against whom such Claim is made shall have the right, but not the obligation, to undertake the sole defense of, and to compromise or settle, the Claim on behalf, for the account, and at the risk and expense of the Indemnifying Party (including without limitation the payment by Indemnifying Party of the attorneys' fees of the Indemnified Party); provided, however, that if the Indemnified Party undertakes the sole defense of such Claim on behalf, for the account, and at the risk and expense of the Indemnifying Party, it shall defend such Claim in good faith and shall apprise the Indemnifying Party from time to time as the Indemnified Party deems appropriate of the progress of such defense. If one or more of the Indemnifying Parties assumes the defense of such Claim, the obligation of such Indemnifying Party hereunder as to such Claim shall include taking all steps necessary in the defense or settlement of such Claim. The Indemnifying Party, in the defense of such Claim, shall not consent to the entry of any judgment or enter into any settlement (except with the written consent of the Indemnified Party) which does not include as an unconditional term thereof the giving by the claimant to the Indemnifying Party against whom such Claim is made a release from all liability in respect of such Claim (which release shall exclude only any obligations incurred in connection with any such settlement). If the Claim is one that cannot by its nature be defended solely by the Indemnifying Party, then the Indemnified Party shall make available, at the Indemnifying Party's expense, all information and assistance that the Indemnifying Party reasonably may request. (c) Insurance and Defenses. From and after the Closing, the Purchaser and/or its successor-in-interest will promptly tender all matters which may give rise to a Claim for indemnification against any Seller pursuant to this Article VI and which may be covered by insurance to the applicable insurance companies under any and all applicable insurance policies maintained by any of the Purchaser Indemnified Parties and shall further use commercially reasonable efforts to cause such insurance companies to provide a defense and indemnification from and against such matters. In addition, the Purchaser will pursue, and will cause the Purchaser Indemnified Parties to pursue, all claims which they may have against any one or more third parties in connection with any events giving rise to a Claim for indemnification against the Sellers pursuant to this Agreement. 35

ARTICLE VII MISCELLANEOUS 7.1 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. 7.2 Governing Law; Jurisdiction and Forum; Waiver of Jury Trial.

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to the choice of law principles thereof. (b) Each party hereto irrevocably submits to the jurisdiction of any state or federal court located in Los Angeles County, California in any Action arising out of or relating to this Agreement, and hereby irrevocably agrees that all claims in respect of such action shall be heard and determined in a state or federal court of competent jurisdiction located in Los Angeles County, California. Each party hereto hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The parties further agree, to the extent permitted by law, that final and unappealable judgment against any of them in any action or proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified copy of which shall be conclusive evidence of the fact and amount of such judgment. (c) Each party hereto waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any action, suit or proceeding arising out of or relating to this Agreement. Each party hereto certifies that it has been induced to enter into this Agreement or instrument by, among other things, the mutual waivers and certifications set forth in this Section 7.2. 7.3 Entire Agreement. This Agreement (including the schedules and exhibits hereto and the Related Agreements) and any and all confidentiality agreements (the "Confidentiality Agreements"), entered into by the Purchaser or its Affiliates and the Company or its Affiliates in connection with the Purchaser's review of the Company and its Affiliates contain the entire agreement between the parties with respect to the subject matter hereof and there are no agreements, understandings, representations or warranties between the parties other than those set forth or referred to herein. 7.4 Expenses. Except as set forth in this Agreement, whether the transactions contemplated hereby are consummated or not, all legal and other costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses unless expressly otherwise contemplated herein. 36

7.5 Notices. All notices and other communications to be given to any party hereunder shall be sufficiently given for all purposes hereunder (i) upon delivery, if given if in writing and delivered by hand, courier, overnight delivery service or facsimile transmission, or (ii) three days after being mailed, if given by certified or registered mail, return receipt requested, with appropriate postage prepaid, and shall be directed to the address set forth below (or at such other address or facsimile number as such party shall designate by like notice): (a) If to the Purchaser: Ubi Participations S.A. Yves Guillemot, Chairman and Chief Executive Officer 65, rue Hellier 35000, Rennes, France Fax No.: 33-1-48-18-59-73 Yves Guillemot, Chairman and Chief Executive Officer Ubi Soft Entertainment S.A. 28, rue Armand Carrel 93108 Montreuil, France Fax No.: 33-1-48-18-59-73 GTG/Wizard, LLC c/o Gores Technology Group 10877 Wilshire Boulevard, Suite 1805 Los Angeles, CA 90024 Attention: General Counsel Fax No.: (310) 209-3310 Gores Technology Group 6260 Lookout Road Boulder, CO 80301 Attention: Chief Financial Officer Fax No.: (303) 531-3200 Riordan & McKinzie 600 Anton Boulevard, Eighteenth Floor Costa Mesa, CA 92626 Attention: James W. Loss, Esq. Fax No.: (714) 549-3244

With a copy to:

(b)

If to the Company or any Seller:

With a copy to:

And a copy to:

7.6 Brokers and Finders. The Sellers shall indemnify and hold the Purchaser harmless from any and all broker's commissions, finder's fees and similar payments that become payable in connection with this transaction pursuant to any agreement to which a Seller or the 37

Affiliate of any Seller is a party or as a result of any action taken or agreement made by any Seller or the Affiliate of any Seller. The Purchaser shall indemnify and hold the Sellers harmless from any and all broker's commissions, finder's fees and similar payments that become payable in connection with this transaction pursuant to any agreement to which the Purchaser or any Affiliate of the Purchaser is a party or as a result of any action taken or agreement made by the Purchaser or any Affiliate of the Purchaser. The aforesaid indemnification obligations of Sellers and Purchaser shall be notwithstanding any other provision herein. 7.7 Successors and Assigns. The terms and provisions of this Agreement will bind the Sellers and the Purchaser and their respective successors and permitted assigns. Except as otherwise expressly provided herein (including, without limitation, the Purchaser's right and obligation to assign all of its rights and obligations in and to the TLC Entertainment Assets and the LLC Interest and under this Agreement to a direct or indirect, wholly owned U.S. subsidiary of USE as contemplated by Section 5.17), neither this Agreement, nor any rights hereunder may be assigned (i) by the Purchaser or any permitted assignee of the Purchaser without the prior written consent of the Company or (ii) by any Seller, or any permitted assignee of any Seller without the prior written consent of the Purchaser or USE; provided, however, that, except as limited by Section 5.21, any Seller shall have the right to assign any or all of such Seller's rights or obligations under this Agreement to any Person that acquires a substantial portion of such Seller's assets or business other than a Person engaged in the business of developing, publishing and marketing consumer entertainment software products. 7.8 Third Party Beneficiaries. This Agreement is not intended to confer upon any Person not a party hereto (and their successors and assigns) any rights or remedies hereunder. 7.9 Headings; Definitions. The section and article headings contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of this Agreement. All references to Sections or Articles contained herein mean Sections or Articles of this Agreement unless otherwise stated. All capitalized terms defined herein are equally applicable to both the singular and plural forms of such terms. 7.10 Amendments and Waivers. This Agreement may not be modified or amended except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought. Either party hereto may, only by an instrument in writing, waive compliance by the other party hereto with any term or provision of this Agreement on the part of such other party hereto to be performed or complied with. The waiver by any party hereto of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach. 7.11 Interpretation. For the purposes of this Agreement, "to the knowledge of the Sellers" shall mean the actual knowledge of the executive officers identified on Section 7.11 of the TLC Disclosure Schedule. It is understood and agreed that the inclusion of any specific item in the TLC Disclosure Schedule is not intended to imply that the items so included or other 38

items, are or are not material, and neither party shall use the fact of the inclusion of any such item in the TLC Disclosure Schedule in any dispute or controversy between the parties as to whether any obligation, item or matter not described herein or included in the TLC Disclosure Schedule is or is not material for purposes of this Agreement. The parties do not intend to create, nor shall anything in this Agreement be construed to create, a partnership or joint venture between or among any of the parties. 7.12 No Right of Setoff. Notwithstanding anything contained herein to the contrary, the Purchaser's obligation to make payments in accordance with this Agreement shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation any set-off, counterclaim, recoupment, defense or other right which the Purchaser may have against any Seller or any other Person for any reason whatsoever. 7.13 Specific Performance. The parties hereto agree that irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, in the event that any party fails to consummate the transactions contemplated hereby in accordance with the terms of this Agreement and that the parties shall be entitled to specific performance in such event, without the necessity of proving the inadequacy of money damages as a remedy in addition to any other remedy or law or in equity. 7.14 Severability. If any provision of this Agreement or the application thereof to any Person or circumstances is held to be invalid, illegal or unenforceable to any extent, this Agreement shall be reformed to render the Agreement valid and enforceable while reflecting to the greatest extent permissible the intent of the parties. [ remainder of page intentionally left blank ]

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[Counterpart signature page of the Purchaser to Purchase and Sale Agreement ] IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of the parties as of the day first above written.

UBI PARTICIPATIONS S.A., a French Societe Anonyme By: Yves Guillemot, Chairman and Chief Executive Officer

[ counterpart signature page of the Sellers follows ]

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[ counterpart signature page of the Sellers to Purchase and Sale Agreement ] IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of the parties as of the day first above written.

GTG/WIZARD, LLC, a Delaware limited liability company By: Alec E. Gores, Chairman MINDSCAPE LLC, a Delaware limited liability company By: Alec E. Gores, Chairman PALLADIUM INTERACTIVE LLC, a Delaware limited liability company By GTG/Wizard, LLC, a Delaware limited liability company, Its Manager By: Alec E. Gores, Chairman PF. MAGIC, LLC, a Delaware limited liability company By GTG/Wizard, LLC, a Delaware limited liability company, Its Manager By: Alec E. Gores, Chairman

BRODERBUND SOFTWARE, INC., a Delaware corporation By: Alec E. Gores, President and Chief Executive Officer TLC MULTIMEDIA LLC, a Minnesota limited liability company By: Alec E. Gores, Chairman STRATEGIC SIMULATIONS LLC, a Delaware limited liability company By Mindscape LLC, a Delaware limited liability company, Its Manager By: Alec E. Gores, Chairman

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