Agreement for Sale of Shares - Macrovision Corp. and C-Dilla Ltd.


[*] = CERTAIN  INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL  TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                              DATED 18th June 1999


                             (1) PETER ALFRED NEWMAN
                             DR KEITH GEORGE WARREN
                             IPR INDUSTRIES LIMITED
                                COINSHIRE LIMITED
                                 QUESTER VCT PLC
                     ABINGWORTH VENTURES LIMITED PARTNERSHIP
                   ABINGWORTH VENTURES LIMITED PARTNERSHIP "B"
                             ALTA-BERKELEY 111 C.V.

                                 (2) COLIN NUNN
                                   TOBY GAWIN

                                       and

                           (3) MACROVISION CORPORATION







                          AGREEMENT FOR SALE OF SHARES


                                   relating to

                                 C-DILLA LIMITED







THIS AGREEMENT is made the                                                1999
BETWEEN:-

(1)  the persons whose names and addresses are set out in Column 1 of Schedule 1
     Part 1 ("the Vendors");

(2)  the persons whose names and addresses are set out in Schedule 1 Part 3 (the
     "Warrantors"); and

(3)  MACROVISION  CORPORATION a Delaware  Corporation whose registered office is
     at 1341 Orleans Drive Sunnyvale California 94089 ("the Purchaser")

WHEREAS:-

(1)  C-DILLA  LIMITED ("the Company")  (further  details of which are set out in
     Schedule  2) was  incorporated  on the 31st day of  January  1992 under the
     Companies Act 1985 with company  number  2683202 and at the date hereof has
     an authorised share capital and issued share capital as set out in Schedule
     2.

(2)  The Vendors are the legal and beneficial  owners of the number and class of
     shares (issued as fully paid or credited as fully paid) shown against their
     respective  names  in  Column  2 of  Schedule  1  (constituting  all of the
     Company's  issued share  capital not already  owned by the  Purchaser)  and
     which said shares are hereinafter called "the Sale Shares".

(3)  The Company is a private company.

(4)  The Vendors have agreed to sell (each according to his aforesaid  interest)
     and the Purchaser has agreed to purchase all the Sale Shares upon the terms
     and subject to the conditions hereinafter contained.

NOW IT IS HEREBY AGREED as follows:-

1.   Definitions and Interpretation

     IN this Agreement and in its Schedules the expressions  defined below shall
     (except where the context otherwise requires) have the following meanings:-

     "the Accounts"           the audited  financial  statements  of the Company
                              comprising a balance sheet profit and loss account
                              notes  and  directors  report  as at and  for  the
                              period ended on the Balance Sheet Date

    "Balance Sheet Date"      31st December 1998


                                       2



    "Business"                the design, development,  production and marketing
                              of secure  software  products  designed to prevent
                              the unauthorised use of digital media


    "Business Day"            a day on which the  clearing  banks in the City of
                              London are open for business

    "the Cancellation
    Agreements"               the cancellation  agreements in the Agreed Form to
                              be entered into by the Optionholders  prior to the
                              Completion Date

    "the Companies Act"       the Companies Act 1985

    "Completion"              Completion  in accordance  with the  provisions of
                              Clause 4

    "Completion Date"         the 18th June 1999

    "Cash Consideration"      the  aggregate  cash  amount  to be  paid  by  the
                              Purchaser to the Vendors in part consideration for
                              the  acquisition  of the  Sale  Shares  as set out
                              opposite their names in Clause 3

    "Consideration"           the  Cash   Consideration  and  the  Consideration
                              Shares

    "Consideration Shares"    109,199  shares  of  common  stock,  US$0.001  par
                              value,  in  the  capital  of the  Purchaser  to be
                              issued by the  Purchaser to certain of the Vendors
                              as indicated in Clause 3 in part consideration for
                              the  acquisition  of such  Vendors' Sale Shares as
                              set out in clause 3

    "Covenantor"              the persons named as such in Clause 6

    "the Directors"           those referred to as such in Schedule 2

    "the Disclosure Letter"   a letter of even date herewith from the Warrantors
                              to  the  Purchaser  together  with  the  documents
                              annexed to such letter

    "Employees"               all the employees of the Company at the Completion
                              Date  particulars  of  which  are  set  out in the
                              Disclosure Letter


                                       3




    "Encumbrances"            all and any lien, charge,  encumbrance,  mortgage,
                              pledge,   security   interest  or  other   adverse
                              interest,   right,   equity   or   claim   of  any
                              description

    "FRS"                     a financial  reporting  standard issued or adopted
                              by The Accounting Standards Board Limited

    "Intellectual Property
    Rights"                   any or all of the  following  (whether  written or
                              unwritten)  and all rights in,  arising out of, or
                              associated  therewith  anywhere in the world:  (i)
                              all  United  Kingdom,  international  and  foreign
                              patents   and   applications   therefor   and  all
                              reissues, continuations, divisionals, renewals and
                              extensions  thereof;  (ii) all inventions (whether
                              patentable   or   not),   invention   disclosures,
                              discoveries, secret processes, improvements, trade
                              secrets,   proprietary   information,   know  how,
                              technology, technical data and customer lists, and
                              all   documentation   relating   to   any  of  the
                              foregoing;   (iii)   all   copyrights,   copyright
                              registrations  and  applications  therefor and all
                              mask   works,   mask   work    registrations   and
                              applications therefor; (iv) all industrial designs
                              and   registrations   and  applications   therefor
                              throughout the world; (v) all trade names,  logos,
                              trademarks  and  service   marks;   trademark  and
                              service  mark   registrations   and   applications
                              therefor  and all  goodwill  associated  therewith
                              throughout the world;  (vi) all databases and data
                              collections and all rights therein  throughout the
                              world; and (vii) all computer  software  including
                              all   source   code,   object   code,    firmware,
                              development  tools,   files,   records  and  data,
                              specifications,  all  media  on  which  any of the
                              foregoing   is   recorded,   (viii)  any  similar,
                              corresponding  or equivalent  rights to any of the
                              foregoing  and  (ix)  all  manuals,  instructions,
                              catalogues and other documentation  related to any
                              of the foregoing

    "Group"                   the Purchaser and each and any of its subsidiaries
                              from time to time


                                       4




    "the Key Employees"       [*]

    "Management Accounts"     the monthly management accounts of the Company for
                              the  period  from 1st  January  1999 to 30th April
                              1999

    "the Management 
    Accounts Date"            30th April 1999

    "the Optionholders"       the persons  whose names and addresses are set out
                              in column 1 of Schedule 1 Part 2

    "Outstanding Options"     the outstanding options over or affecting unissued
                              shares in the capital of the  Company  held by the
                              Optionholders and set out in Schedule 1 Part 2

    "the Properties"          the properties short  particulars  whereof are set
                              out in Schedule 4 and  includes  any part or parts
                              thereof

    "the Purchaser's 
     Solicitors"              Messrs.   Pitmans  of  47  Castle  Street  Reading
                              Berkshire RG1 7SR (Ref. JCH)

    "the Sale Shares"         the shares of the Company specified in Column 2 of
                              Schedule 1

    "SSAP"                    a  statement  of  standard   accounting   practice
                              adopted by The Accounting Standards Board Limited

    "Taxation"                all   forms   of   taxation,    duties,   imposts,
                              contributions,  withholdings,  charges,  sums  and
                              levies (including  social security  contributions)
                              whatsoever  wherever  and  whenever  imposed  by a
                              Taxation  Authority  and whether or not  primarily
                              payable by the Company or any other person and all
                              amounts  recoverable by a Taxation Authority as if
                              they were  Taxation and shall be deemed to include
                              the  cost  of  removing  any  charge  over  assets
                              imposed by any Taxation Authority and in each case
                              including all charges,  interest,  fines penalties
                              and surcharges  incidental or relating to the same
                              and "Tax" shall be construed accordingly

----------
[*] = CERTAIN  INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL  TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.


                                       5



    "Taxation  Authority"     the Inland  Revenue,  HM Customs and Excise or any
                              other  governmental,   state,   federal  or  other
                              fiscal,   revenue  customs  or  excise  authority,
                              department,  agency, body or office whether in the
                              United  Kingdom or  elsewhere  in the world having
                              authority  or  jurisdiction  in  relation  to  the
                              Company for any Taxation purposes


    "TA"                      the Income and Corporation Taxes Act 1988

    "TCGA"                    the Taxation of Chargeable Gains Act 1992

    "VATA"                    the Value Added Tax Act 1994

    "the Vendors' 
     Solicitors"              Messrs.  SJ Berwin  of 222  Grays Inn Road  London
                              WC1X 8HB

    "the Warranties"          the  warranties  given  by the  Warrantors  to the
                              Purchaser construed in accordance with Clause 5

1.2       References to statutory provisions shall be construed as references to
          those provisions as respectively re-enacted from time to time (whether
          before or after the date hereof) and shall  include any  provisions of
          which they are re-enactments. Terms defined in Taxation statutes shall
          bear the same meanings in Schedule 3 unless otherwise defined therein.

1.3       The  expressions  "the Vendors" and "the  Warrantors"  includes  their
          respective personal representatives.

1.4       Any  document  expressed  to be "in the Agreed  Form"  means in a form
          approved and for the purpose of identification  signed by or on behalf
          of the parties hereto.

1.5       The  masculine  gender  shall  include the feminine and neuter and the
          singular number shall include the plural and vice versa.

1.6       References  to  persons  shall  include   trustees  bodies   corporate
          unincorporated  associations  partnerships states and governmental and
          administrative entities.


1.7       Save as herein expressly provided otherwise expressions defined in the
          TCGA the TA or in the  Companies  Act shall where used herein have the
          meanings therein given to them.

1.8       The captions to clauses and sub-clauses or to paragraphs in Schedule 3
          hereto and the summary notes  appearing  herein in brackets  following
          references to provisions of the taxation statutes are for the purposes
          of  information  only and are not part of this 

                                       6


          Agreement and shall not be used in the construction of any part or the
          whole of this Agreement.

1.9       References  to  clauses  sub-clauses  paragraphs   sub-paragraphs  and
          schedules relate to the relevant provisions of this Agreement.

2.        Sale and Purchase

2.1       SUBJECT to the terms of this  Agreement  each of the  Vendors as legal
          and  beneficial  owner and with full  title  guarantee  shall sell the
          number of Sale Shares set out  opposite his name in column 2 of Part 1
          of Schedule 1 free from Encumbrances and with all rights which are now
          attached  to the  Sale  Shares  and  the  Purchaser  (if  the  Vendors
          simultaneously shall sell) shall purchase all of the Sale Shares .

2.2       Each Vendor waives any  pre-emption  rights which he may have relating
          to the  Sale  Shares  of  which he is the  registered  holder  whether
          conferred by the Articles of Association of the Company or otherwise.

3.        Consideration

3.1       THE  Consideration  for the transfer of the Sale Shares in  accordance
          with  the  terms  of this  Agreement  shall  be paid or  satisfied  as
          follows:-

          (a)       the  payment  by the  Purchaser  to the  Vendors of the Cash
                    Consideration  on Completion  which, as between the Vendors,
                    shall be divided between them in the amounts shown in column
                    3 of Schedule 1 Part 1; and

          (b)       the  allotment  and issue to certain  of the  Vendors of the
                    Consideration  Shares  credited  as fully paid at a price of
                    US$51.62 per Consideration Share on Completion.

3.2       The Consideration  Shares shall be apportioned  between the Vendors as
          set out in column 3 of Schedule 1 Part 1.

3.3       Each of the Vendors receiving Consideration Shares by execution hereof
          represents  and  warrants to the  Purchaser  that such Vendor is not a
          U.S.  Person as defined in Regulation S under the U.S.  Securities Act
          of 1933 (as amended)  ("the 1933 Act") and in particular is not: 

          (i)       a natural  person  resident  in the  United  States;  

          (ii)      a partnership or corporation organized or incorporated under
                    the laws of the United States;  

          (iii)     an estate of which any executor or administrator is resident
                    in the United States or  incorporated  under the laws of the
                    United States;


                                       7



          (iv)      a trust of which  any  trustee  is  resident  in the  United
                    States or incorporated under the laws of the United States;

          (v)       an  agency or branch  of a  foreign  entity  located  in the
                    United States;

          (vi)      a discretionary  account or similar account held by a dealer
                    or other  fiduciary  organized,  incorporated or resident in
                    the United States,

          (vii)     a  non-discretionary  account or similar  account  held by a
                    dealer or other  fiduciary  for the  benefit or account of a
                    beneficiary resident in the United States or incorporated in
                    the United States; or

          (viii)    a  non-U.S.  partnership  or  corporation  formed  by a U.S.
                    person or entity principally for the purpose of investing in
                    securities not registered  under the U.S.  Securities Act of
                    1933.

3.4       Each of the Vendors receiving  Consideration  Shares  acknowledges and
          agrees that the Consideration  Shares are being allotted and issued to
          him or it in accordance with the exemption from registration under the
          1933 Act provided by Regulation S and will be deemed to be "restricted
          securities"  as defined  in Rule 144 under the 1933 Act.  Each of such
          Vendors  also  agrees  that  he  or  it  will  sell  or  transfer  the
          Consideration  Shares  only  in  accordance  with  the  provisions  of
          Regulation S, pursuant to registration under the 1933 Act, or pursuant
          to  an  available  exemption  from  registration,  including,  without
          limitation,  Rule 144 and agrees not to engage in hedging transactions
          with regard to the Consideration  Shares unless in compliance with the
          1933 Act. The parties  hereto agree that the  Purchaser has not agreed
          to register  any  Consideration  Shares at any time and will refuse to
          register any transfer of the Consideration  Shares made otherwise than
          in accordance with the foregoing.

3.5       The parties agree that the  certificate for the  Consideration  Shares
          will bear the following legend:

          "THE SHARES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "ACT") WITH THE
          UNITED STATES SECURITIES AND EXCHANGE COMMISSION, AND THE COMPANY DOES
          NOT INTEND TO REGISTER  THEM.  PRIOR TO JUNE 18, 2000,  THE SHARES MAY
          NOT BE OFFERED OR SOLD  (INCLUDING  OPENING A SHORT  POSITION  IN SUCH
          SECURITIES) IN THE UNITED STATES OR TO U.S. PERSONS AS DEFINED BY RULE
          902(k)  ADOPTED UNDER THE ACT, OTHER THAN TO  DISTRIBUTORS  UNLESS THE
          SHARES  ARE  REGISTERED  UNDER.THE  ACT,  OR  AN  EXEMPTION  FROM  THE
          REGISTRATION  REQUIREMENTS  OF THE  ACT IS  AVAILABLE.  PURCHASERS  OF
          SHARES PRIOR TO JUNE 18, 2000 MAY RESELL SUCH SECURITIES ONLY PURSUANT
          TO AN  EXEMPTION  FROM  REGISTRATION  UNDER  THE ACT OR  OTHERWISE  IN
          ACCORDANCE  WITH THE  PROVISIONS OF  REGULATION S OF THE ACT.  HEDGING
          TRANSACTIONS  INVOLVING THE SECURITIES MAY NOT BE CONDUCTED  UNLESS IN
          COMPLIANCE  WITH  THE  ACT.  A  HOLDER


                                       8



          OF THE  SECURITIES WHO IS A DISTRIBUTOR,  DEALER,  SUB  UNDERWRITER OR
          OTHER SECURITIES PROFESSIONAL,  IN ADDITION,  CANNOT PRIOR TO JUNE 18,
          2000 RESELL THE SECURITIES TO A U.S.  PERSON AS DEFINED BY RULE 902(k)
          OF REGULATION S UNLESS THE SECURITIES ARE REGISTERED  UNDER THE ACT OR
          ANY EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE.

3.6       The  Purchaser  shall,  upon request,  instruct its transfer  agent to
          remove the legend referred to in clause 3.5 from the  certificates for
          any Consideration Shares to be sold:-

          (a)       pursuant to a current and effective registration  statement;
                    or

          (b)       pursuant  to  Rule  144 or  otherwise  under  any  available
                    exemption from the Act

          upon receipt of an undertaking that the relevant Vendor shall transfer
          the Consideration Shares only pursuant to such registration statement,
          Rule 144 or otherwise as provided in the legend set out in clause 3.5.

3.7       The Purchaser  shall take all actions  reasonably  necessary to enable
          holders  of  Consideration  Shares  to sell  such  securities  without
          registration  under  the  1933  Act  within  the  limitations  of  the
          exemptions  provided  by (i) Rule  144,  or (ii) any  similar  rule or
          regulation  hereafter  adopted  by the U.S.  Securities  and  Exchange
          Commission  (the   "Commission")   including,   without  limiting  the
          generality  of the  foregoing,  filing on a timely  basis all  reports
          required to be filed by the U.S.  Securities  Exchange Act of 1934, as
          amended  (the  "Exchange  Act").  Upon  request  of any  holder of the
          Consideration  Shares,  the  Purchaser  shall deliver to such holder a
          written   statement   as  to  whether  it  has   complied   with  such
          requirements,  a copy of the most recent annual or quarterly report of
          the  Purchaser  and such other  reports and  documents so filed by the
          issuer as the holder may reasonably request in complying with any rule
          or regulation of the  Commission  allowing the holder to sell any such
          securities without registration.

4.        Completion

          SUBJECT to the  provisions  of this  Agreement  Completion  shall take
          place  at  the  offices  of  the  Purchaser's  Solicitors  immediately
          following exchange of this Agreement when and where:-

4.1       the Vendors will deliver or procure the delivery (where appropriate as
          agent for the Company) to the Purchaser of:-


                                       9



          (a)       duly executed  transfers of the Sale Shares in favour of the
                    Purchaser or its nominees  together with the relevant  share
                    certificates  and any power of attorney under which any such
                    transfers are executed on behalf of any of the Vendors;

          (b)       letters of resignation in the Agreed Form executed as a Deed
                    from M J Brooke,  N E V Martensson,  P E N  Martensson,  P A
                    Newman and S Acland as Directors  incorporating in each case
                    an  acknowledgement  that he has no claim whatsoever against
                    the Company;

          (c)       acknowledgements  in the Agreed  Form  executed as a Deed by
                    each of the  Vendors  confirming  that  they  have no  claim
                    against the Company on any account whatsoever and that there
                    are no arrangements  outstanding under which the Company has
                    or could have any  obligation to them other than in relation
                    to those Vendors who are  continuing in office in respect of
                    any ongoing obligations in relation to that office;

          (d)       powers of attorney  in the Agreed  Form  executed by each of
                    the  Vendors  in  favour  of the  Purchaser  empowering  the
                    Purchaser to exercise the Vendors' rights as shareholders of
                    the  Company  during the period  prior to the  stamping  and
                    registration  of the transfers  referred to in paragraph (a)
                    above;

          (e)       the duly executed Cancellation Agreements;

          (f)       the Disclosure Letter duly executed by the Warrantors.

4.2       the Vendors will deliver to the Purchaser as agents for the Company or
          otherwise make available at the Company's registered office all papers
          documents  records and accounts  belonging to or in the  possession or
          under the control of the Company including:-

          (a)       the  statutory  and minute  books of the  Company  duly made
                    up-to-date   and  the  common   seal  and   certificate   of
                    incorporation thereof together with up-to-date prints of the
                    memorandum  and  articles  of  association   and  the  share
                    certificate  book  together  with all  unissued or cancelled
                    share certificates of the Company;

          (b)       all books of account or reference as to customers  and other
                    records and all insurance policies in any way relating to or
                    concerning the business of the Company;

          (c)       all  deeds  and   documents  of  title  to  all  assets  and
                    properties including the Property of the Company;

          (d)       the bank cheque books and paying-in books of the Company and
                    current  statements of all its bank accounts all fuel agency
                    cards and other  credit cards issued to any



                                       10



                    Vendors in their  capacity as  Directors or Employees of the
                    Company  who  are not  continuing  in  such  capacity  after
                    Completion;

          (e)       all  employment  and PAYE  records,  VAT records and service
                    agreements or hire purchase  leasing or other  agreements of
                    any kind entered into by the Company.

          (f)       certified copies of board  resolutions of the Company in the
                    Agreed Form

          (i)       regarding the acceptance of the  resignation  from office of
                    those persons referred to in clause 4.1.(b) above;

          (ii)      approving (subject only to proper stamping) the transfers of
                    the Sale Shares;

          (iii)     approving the  registration of the Purchaser or its nominees
                    as members of the Company  subject to the production of duly
                    stamped and completed stock transfer forms;

          (iv)      amending all relevant bank  mandates in accordance  with the
                    Purchaser's instructions;

4.3       Subject to the above the Purchaser will:-

          (a)       procure the delivery by way of  telegraphic  transfer to the
                    Vendors'  Solicitors  for the  account of the Vendors of the
                    aggregate  amount of the Cash  Consideration  (the  Vendors'
                    Solicitors are authorised by the Vendors to receive  payment
                    of the Cash  Consideration  on the  Vendors'  behalf and the
                    receipt  by the  Vendors'  Solicitors  shall  be a good  and
                    sufficient discharge to the Purchaser); and

          (b)       allot and issue the Consideration  Shares in accordance with
                    clause  3.1(b) and  appropriate  share  certificates  to the
                    relevant Vendors; and

          (c)       deliver to the relevant  Optionholders  option  certificates
                    for  the  options  granted  to them  as  referred  to in the
                    Cancellation  Agreements  and procure the delivery by way of
                    telegraphic  transfer  to the  Vendors'  Solicitors  for the
                    account of the Vendors of the  aggregate  amount of the cash
                    entitlement (net of tax) of the Optionholders.

5.        Warranties

5.1       SUBJECT to  matters  fairly  disclosed  in the  Disclosure  Letter the
          Warrantors  hereby  severally  warrant  to the  Purchaser  contracting
          itself and for any member of the  Purchaser's  Group from time to time
          who is a successor in title to the Sale Shares that:-


                                       11



          (a)       in the case of [*] each of the statements made in Schedule 3
                    is true and correct in every  particular at the date of this
                    Agreement;

          (b)       in the case of [*] each of the statements  made in clauses 1
                    (other  than  sub-clauses  1.7,  1.15 and 1.16),  2, 3, 4, 5
                    (other than  sub-clauses 5.7 and 5.8 which shall be given on
                    the basis of the last eighteen month period only rather than
                    last six year period),  6, 7, 8, 9, 12, 14, 15, 16 and 18 of
                    Schedule 3 is to the best of his knowledge  information  and
                    belief true and correct in every  particular  at the date of
                    this Agreement;

          (c)       in the case of [*] each of the statements made in Schedule 3
                    clauses 1 (other than  sub-clauses  1.7,  1.15 and 1.16),  5
                    (other than  sub-clauses 5.7 and 5.8 which shall be given on
                    the basis of the last eighteen month period only rather than
                    last six year  period),  6, 7, 8, 9, 12,  15 and 18 of is to
                    the best of his  knowledge  information  and belief true and
                    correct in every particular at the date of this Agreement;

                    (and so that none of the  paragraphs  of Schedule 3 shall be
                    limited or restricted by reference to or inference  from the
                    terms of any other of those paragraphs) (and notwithstanding
                    any  information  the  Purchaser  may have  received or been
                    given or have had as actual implied or  constructive  notice
                    prior to the signing hereof other than that fairly disclosed
                    in the Disclosure Letter).

5.2       Each of the Vendors (other than the Warrantors) hereby warrants to the
          Purchaser  contracting  itself and for any  member of the  Purchaser's
          Group from time to time who is a successor in title to the Sale Shares
          that (on a  several  basis)  in  respect  of the Sale  Shares  set out
          opposite their  respective names in column 2 of Schedule 1 Part 1 that
          at the  date  of this  Agreement  each  of the  statements  set out in
          paragraphs1.7,  1.14,  1.15,  1.16 and 1.17 of  Schedule 3 is true and
          accurate  in  every  particular  at the  date of this  Agreement  (and
          notwithstanding  any  information  the  Purchaser may have received or
          been given or have had as actual implied or constructive  notice prior
          to the  signing  hereof).  The  Vendors  (other  than the  Warrantors)
          acknowledge  that the  Purchaser  is entering  into this  Agreement in
          reliance on each of the said warranties and representations which have
          been given with the  intention of inducing the Purchaser to enter into
          this Agreement.

5.3       If there shall be any breach of the terms of this  Agreement by any of
          the Vendors (including the Warrantors) the Purchaser shall be entitled
          to  compensation  in respect of any loss  resulting  from such  breach
          subject (where  relevant) to the limitations and 

----------
[*] = CERTAIN  INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL  TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                       12



          restrictions in this Agreement. Provided Always that the provisions of
          this clause 5.3 shall be without  prejudice  to any other remedy which
          the  Purchaser  may have by reason of a breach of any such warranty or
          representation.  Notwithstanding  the  foregoing it is agreed that the
          Purchaser shall have no right to rescind this Agreement.

5.4       If at any time on or after Completion there shall be any breach of any
          of the Warranties given by the Warrantors then the Warrantors will pay
          to the Purchaser an amount equal to the  diminution  thereby caused in
          the  value of the Sale  Shares  together  with  all  costs  (including
          reasonable legal costs on an indemnity basis) and charges and expenses
          incurred  or  payable  by the  Purchaser  either  before  or after the
          commencement of any action in connection therewith.

5.5       The benefit of the Warranties  contained in this Clause 5 and Schedule
          3 shall be  assignable  in whole or in part to any person  entitled to
          the benefit thereof pursuant to sub-clause 5.1 of this Clause 5.

5.6       Any  liability to the  Purchaser or any other person  hereunder may in
          whole or in part be  released  compounded  or  compromised  or time or
          indulgence  given  by  the  Purchaser  or  such  other  person  in its
          discretion  as  regards  all  or any of  the  Vendors  (including  the
          Warrantors)  under such  liability  without in any way  prejudicing or
          affecting  the  rights  against  any other or  others  of the  Vendors
          (including the Warrantors)  under the same or a like liability whether
          joint or several or otherwise.

5.7       Subject to clause 5.1 and the  limitation  set out in paragraph 1.9 of
          Schedule 5 the  Warranties  contained  in this Clause 5 and Schedule 3
          shall  continue  in full force and  effect  after  Completion  and the
          Purchaser shall be entitled on and after  Completion to take action in
          respect of any breach or non fulfilment of any of the  representations
          and warranties given by the Vendors and/or the Warrantors discoverable
          by the Purchaser before Completion  provided it was not actually known
          to Victor Viegas, Bill Krepick, Brian Dunn or John Ryan and the rights
          of  the  Purchaser  shall  not  be  affected  by  Completion,  by  any
          investigations  made by or on behalf of the Purchaser into the affairs
          of the  Company by the  Purchaser  failing to  exercise or delaying in
          exercising  any right or remedy or by anything  else except a specific
          authorised written waiver or release and no single or partial exercise
          of a right shall preclude a further or other exercise.


                                       13



5.8       None of the  information  supplied by the Company or their  respective
          professional  advisers  to the  Vendors  or the  Warrantors  or  their
          representatives  or  professional  advisers  in  connection  with this
          Agreement  or the  documents  referred  to in it or in relation to the
          Business  and  affairs  of  the  Company  shall  be  deemed  to  be  a
          representation  to the Vendors or  Warrantors  (as the case may be) by
          the  Company  of its  accuracy  and the  Vendors  and  the  Warrantors
          undertake to the Purchaser that they will not make a claim against the
          Company in respect thereof.

5.9       Any Warranty  which refers to the knowledge  information  or belief of
          the  Warrantors or the awareness of the Warrantors or similar shall be
          deemed  to  mean  the  knowledge,  information  or  belief  which  the
          Warrantors  actually  had or would  have  had if they  had  made  full
          enquiry into the subject  matter of the Warranty  and, in  particular,
          had made all  reasonable  enquiry with each of the Key  Employees  and
          [*].

5.10      The maximum  aggregate  liability  of each of the  Warrantors  for all
          claims for breach of  Warranty  shall not exceed the  amounts  set out
          opposite his name in column 2 of Schedule 1 Part 3

5.11      The liability of the Warrantors  under the Warranties shall be limited
          as set out in Schedule 5.

5.12      [*]  shall not be liable  for any claim for  breach of the  Warranties
          unless and until the aggregate  amount of all such claims  exceeds the
          total sum of ONE HUNDRED THOUSAND US DOLLARS  (US$100,000) but if such
          aggregate  liability shall exceed that sum [*] shall be liable for the
          whole  amount of such claim or claims and not merely the  excess.  The
          amount of such claim in US Dollars shall be based on the exchange rate
          applicable  at the date of the claim and it is agreed by the Purchaser
          and [*] that if [*] fails to  satisfy  the claim or claims by way of a
          cash  payment to the  Purchaser  within 14 days of the claim or claims
          being agreed or determined the Purchaser shall be entitled to withhold
          from  [*]  or  that  [*]  shall  be  required  to  surrender  (without
          compensation)  such number of stock  options  over the common stock of
          the Purchaser which are in existence at the date of the claim or which
          the  Purchaser  has  otherwise  agreed  to grant to [*]  ("Macrovision
          Options")  as equates  to the  amount of the claim or claims.  For the
          purpose of this  clause the value of each of the  Macrovision  Options
          shall be the sum of THIRTY US DOLLARS (US$30).

5.13      [*]  shall not be liable  for any claim for  breach of the  Warranties
          unless and until the aggregate  amount of all such claims  exceeds the
          total sum of ONE HUNDRED THOUSAND US DOLLARS  (US$100,000) but if such
          aggregate  liability shall exceed 

----------
[*] = CERTAIN  INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL  TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.


                                       14



          that sum [*] shall be liable  for the  whole  amount of such  claim or
          claims  and not  merely  the  excess.  The  amount of such claim in US
          Dollars shall be based on the exchange rate  applicable at the date of
          the claim and it is agreed by the  Purchaser and [*] that if [*] fails
          to  satisfy  the  claim  or  claims  by way of a cash  payment  to the
          Purchaser  within  14 days of the  claim or  claims  being  agreed  or
          determined  that the Purchaser  shall be entitled to withhold from [*]
          or [*] shall be  required to  surrender  (without  compensation)  such
          number of stock options over the common stock of the  Purchaser  which
          are in existence at the date of the claim or which the  Purchaser  has
          otherwise agreed to grant to [*] ("Macrovision Options") as equates to
          the amount of the claim or claims.  For the purpose of this clause the
          value of each of the Macrovision Options shall be the sum of THIRTY US
          DOLLARS (US$30).

6.        Restrictive Covenants

6.1       [*]  ("Covenantor")  undertakes  to the  Purchaser  by way of  further
          consideration   for  the  obligations  of  the  Purchaser  under  this
          Agreement  that for the period of [*] years after  Completion  (unless
          the Covenantor's employment with the Company is terminated during that
          time  otherwise  than for  cause in which  case such  period  shall be
          reduced  to [*] years  after  Completion)  he will  neither on his own
          account  nor in  conjunction  with nor on behalf of any person firm or
          company whether as an employee director consultant shareholder partner
          agent or in any capacity whatsoever directly or indirectly:-

          (a)       solicit  interfere  with  canvass  induce  or  endeavour  to
                    solicit  entice or induce away from the Company any trade or
                    business of the type carried on by the Company in the period
                    of 12 months  prior to the  Completion  Date ("the  Relevant
                    Period") of any person  firm or company who or which  during
                    the Relevant  Period was a client or customer of the Company
                    or a  prospective  client or customer  with whom the Company
                    had entered into serious negotiations;

          (b)       solicit  interfere  with  canvass  induce  or  endeavour  to
                    solicit  entice or induce away from the Company any trade or
                    business  of  the  type  carried  on by the  Company  in the
                    Relevant Period from any person firm or company who or which
                    during the Relevant  Period was a supplier of the Company or
                    a  prospective  supplier  with whom the  Company had entered
                    into serious negotiations;

          (c)       render  any   services  or  supply  any  goods  or  products
                    competing  or likely to compete with those of the Company to
                    any person firm or company who or which  during the Relevant
                    Period  was  a  client  or  customer  of  the  Company  or a
                    prospective  client or  customer  with whom the  Company had
                    entered into serious negotiations;

----------
[*] = CERTAIN  INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL  TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.


                                       15



          (d)       obtain any  services or any goods or products  competing  or
                    likely to compete  with those  obtained by the Company  from
                    any person firm or company who or which  during the Relevant
                    Period  was a  supplier  of  the  Company  or a  prospective
                    supplier  with whom the  Company had  entered  into  serious
                    negotiations;

          (e)       take any  action  likely to result  in any  supplier  of the
                    Company ceasing or reducing its trade with the Company;

          (f)       solicit  entice or induce or endeavour to solicit  entice or
                    induce away from the Company any director manager consultant
                    or senior employee  (earning(pound)30,000  or more gross per
                    annum  (subject to increase  in  accordance  with the Retail
                    Prices  Index))  employed by the  Company at the  Completion
                    Date or during the Relevant  Period to leave the Company and
                    become  employed  or engaged  by any person  firm or company
                    which is in  competition  to any  trade or  business  of the
                    Company as carried out in the Relevant Period whether or not
                    such person would commit any breach of contract by reason of
                    leaving and the  Covenantor  shall not approach any director
                    manager  consultant  or senior  employee for such purpose or
                    authorise  or  knowingly  approve  the  taking of any of the
                    aforesaid actions by any other person firm or company;

          (g)       offer or procure  the offer of  employment  to any  director
                    manager consultant or senior employee (earning (pound)30,000
                    or more gross per annum  (subject to increase in  accordance
                    with the Retail Price Index)) employed by the Company at the
                    Completion Date or during the Relevant Period whether or not
                    such person would commit any breach of contract by reason of
                    leaving and the  Covenantor  shall not approach any director
                    manager  consultant  or senior  employee for such purpose or
                    authorise  or  knowingly  approve  the  taking of any of the
                    aforesaid actions by any other person firm or company;

          (h)       engage in or be concerned or interested  in, in  competition
                    to the  Company,  any trade or  business  carried  on by the
                    Company  in the  Relevant  Period  in  respect  of which the
                    Covenantor was engaged or concerned or interested during the
                    Relevant  Period for the  Company or in respect of which the
                    Covenantor  had  or  has  confidential  information  of  the
                    Company anywhere within the United States;

          (i)       engage in or be concerned or interested  in, in  competition
                    to the  Company,  any trade or  business  carried  on by the
                    Company  in the  Relevant  Period  in  respect  of which the
                    Covenantor was engaged or concerned or interested during the
                    Relevant  Period for the  Company or in respect of which the
                    Covenantor  had  or  has  confidential  information  of  the
                    Company  anywhere  within the European Union and/or European
                    Free Trade Area;


                                       16



          (j)       engage in or be concerned or interested  in, in  competition
                    to the  Company,  any trade or  business  carried  on by the
                    Company  in the  Relevant  Period  in  respect  of which the
                    Covenantor was engaged or concerned or interested during the
                    Relevant  Period for the  Company or in respect of which the
                    Covenantor  had  or  has  confidential  information  of  the
                    Company anywhere within the world;

          (k)       engage in or be concerned or interested  in, in  competition
                    to the  Company,  any trade or  business  carried  on by the
                    Company  in the  Relevant  Period  in  respect  of which the
                    Covenantor was engaged or concerned or interested during the
                    Relevant  Period for the  Company or in respect of which the
                    Covenantor  had  or  has  confidential  information  of  the
                    Company anywhere within the United Kingdom;

          (l)       anywhere  in the world  for any  purpose  whatsoever  use or
                    carry on or be engaged in any business firm or company using
                    any business name used by the Company or any name containing
                    "C-Dilla"  or the  logo  of the  Company  or any  colourable
                    imitation thereof.

6.2       Each of the Vendors undertakes  henceforth not to divulge or use other
          than for the benefit of the Company any  confidential  information  of
          the Company (including without limitation  information  concerning the
          Business,  the  accounts or finances of the Company or its  customers'
          transactions or affairs of which it has knowledge) for a period of [*]
          years  from  the  date  of  acquiring  such  confidential  information
          otherwise than (i) to the professional advisers officers and employees
          of the Company  whose  province it is to know the same and (ii) in the
          case of the  institutional  Vendors each shall be at liberty from time
          to  time  to  make  such   disclosure  to  its   partners,   trustees,
          shareholders,  unit holders and other  participants in relation to the
          business  affairs  and  financial  position of the Company as is usual
          practice in accordance with the business of such institutional Vendors
          and undertakes to use its best  endeavours to prevent the  publication
          or  disclosure  of any such  confidential  information  save that this
          clause shall not prevent any  disclosure of  confidential  information
          required  by  law  or  by  any  governmental  or  other  authority  or
          regulatory body.

6.3       Each of the  Vendors  (other  than the  Covenantor)  agrees that for a
          period of [*] years  from the  Completion  Date it shall not  directly
          solicit  interfere  with canvass induce or endeavour to solicit entice
          or  induce  away from the  Company  any  person  who is then or was at
          Completion a director  manager  consultant  or senior  employee of the
          Company (as that term is defined by paragraph 6.1(f) above)

----------
[*] = CERTAIN  INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL  TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.


                                       17



6.4       The restrictions contained in the preceding sub-clauses are considered
          reasonable by the parties (having taken  independent legal advice) and
          are  considered to be reasonable  and necessary for the  protection of
          the  Company  and  accordingly  the  benefit of the  covenants  may be
          assigned by the  Purchaser  and its  successors  in title  without the
          consent of the Vendors.

7.        Further Assistance

7.1       Each of the  Vendors  undertakes  to do execute  and  perform all such
          further acts deeds documents or things as the Purchaser may reasonably
          require effectively to vest legal and beneficial ownership of the Sale
          Shares in the  Purchaser  or its nominees  free from all  Encumbrances
          whatsoever and to give full effect to the terms of this Agreement.

7.2       Failing   compliance  by  any  Vendor  with  clause  7.1  such  Vendor
          irrevocably  appoints  any  director of the  Purchaser as its attorney
          with full  power  and  authority  in its name and on its  behalf to do
          everything  and to execute all  documents  which such  attorney in his
          absolute discretion considers necessary or desirable to give effect to
          the provisions of clause 7.1.

8.        Publicity

          SAVE  as may be  required  by law  or by  any  governmental  or  other
          authority or regulatory  body none of the Vendors [or the  Warrantors]
          shall issue any  information or statement to the press relating to the
          transaction herein agreed to be effected or any part of it without the
          prior written consent of the Purchaser.

9.        Costs

          EACH party shall pay its own costs and expenses (including the fees of
          agents, representatives, solicitors, accountants and actuaries engaged
          by them) in connection with the negotiation preparation and completion
          of this Agreement and all incidental documents

10.       Governing Law

          THIS Agreement  shall be governed by and construed in accordance  with
          English  law  and  the  parties  agree  to  submit  to  the  exclusive
          jurisdiction of the English Courts.

11.       Notices

11.1      ANY notice or  communication to be given under this Agreement shall be
          in writing and shall be  delivered  personally  or sent by first class
          pre-paid or registered or recorded  delivery post to an address inland
          or by first class air-mail post to an address overseas or by facsimile
          transmission to (in the case of a corporation)  its registered  office
          for the time 


                                       18



          being or (in the case of an individual)  his last known address or (in
          either case) the relevant facsimile number of the party to receive the
          notice.

11.2      Communications  to the  Purchaser  shall  be  marked  for  the  urgent
          attention of the Chief Financial  Officer (or such other individual as
          may be subsequently notified by the Purchaser for that purpose).

11.3      The notice shall be deemed to be given:-

          (a)       if delivered personally at the time of delivery; or

          (b)       if sent by inland  post 2  Business  Days  after the  notice
                    shall have been posted; or

          (c)       if sent by  overseas  post 4 Business  Days after the notice
                    shall have been posted; or

          (d)       if  sent  by  facsimile  at  the  time  of   completion   of
                    transmission  by the sender,  if received at least two hours
                    before  the close of  working  hours on a  Business  Day and
                    otherwise on the next Business Day.

11.4      In proving  service  it shall be  sufficient  to prove  that  personal
          delivery  was made or that the  envelope  containing  the  notice  was
          properly  addressed  and  delivered  into the  custody  of the  postal
          authorities  as a first  class  pre-paid  or  registered  or  recorded
          delivery   letter  or  that  the  facsimile  was   dispatched   and  a
          confirmatory transmission report received.

11.5      For the purpose of this clause 11 "working  hours"  means  between the
          hours of 9.00 am and 5.00 pm  (inclusive)  local time to the recipient
          of the notice.

12.       Assignability

          THE  benefit  of this  Agreement  (including  without  limitation  the
          Warranties) may be assigned by the Purchaser in whole or in part. None
          of the rights of the Vendors  under this  Agreement  shall be assigned
          without the prior written consent of the Purchaser such consent not to
          be unreasonably withheld or delayed.


                                       19



13.       Waiver

          NO failure to exercise nor any delay in exercising any right or remedy
          hereunder by either party shall operate as a waiver  thereof nor shall
          any  single or partial  exercise  of any right or remedy  prevent  any
          further or other  exercise  thereof or the exercise of any other right
          or remedy.  The rights and remedies herein provided are cumulative and
          not exclusive of any rights or remedies herein provided by law. In the
          event that any matter  falls  within the scope of more than one of the
          provisions of this Agreement  nothing shall prevent the Purchaser from
          enforcing   against  the   Vendors   the  more  (or  most)   stringent
          requirement.

14.       Severability

          EACH of the  obligations  contained in the clauses and  sub-clauses of
          this   Agreement   shall  be  construed  as  separate  and   severable
          obligations  but if at any time any one or more of the  obligations is
          or becomes invalid illegal or  unenforceable  in any respect under law
          but would be valid if some part  thereof were deleted or the period or
          area of  application  reduced  such  obligation  shall apply with such
          modification as may be necessary to make it valid and effective and in
          any event the validity  legality and  enforceability  of the remaining
          clauses  and  sub-clauses  hereof  shall not in any way be affected or
          impaired thereby.

15.       Entire Agreement

          This  Agreement  and  the  documents  referred  to in  this  Agreement
          constitute the whole agreement  between the parties in relation to the
          subject matter covered.  No oral explanation or oral information given
          by any party shall alter the  interpretation of this Agreement.  It is
          agreed that:

          (a)       no party has entered into this  Agreement  in reliance  upon
                    any representation, warranty or undertaking which is not set
                    out or referred to in this Agreement;

          (b)       in the  absence  of fraud,  no party will have any remedy in
                    respect  of  any  untrue  statement,   made  to  it  or  its
                    representatives or agents,  upon which it or they relied and
                    such  party's  only remedy will be for breach of contract or
                    as otherwise expressly provided by this Agreement; and

          (c)       this clause shall not exclude any liability  for  fraudulent
                    misrepresentation.


                                       20



16.       Variation

          NO alteration amendment or variation of this Agreement shall be of any
          force or effect  unless  it is in  writing  and  signed by (or by some
          person duly authorised by) each of the parties.

17.       Obligations

          WHERE  this  Agreement  is  executed  by or on  behalf  of two or more
          parties together:-

17.1      this  Agreement  shall not be  revoked or  impaired  as to any of such
          parties by the incapacity or insolvency of the other(s); and

17.2      the Purchaser may release or discharge any party from its  obligations
          under this Agreement or accept any composition  from or make any other
          arrangements  with any party  without  releasing  or  discharging  the
          other(s) or otherwise prejudicing or affecting the rights and remedies
          of the Purchaser against the other(s).

18.       Execution

18.1      THIS  Agreement may be executed in any number of  counterparts  and by
          the  parties on  different  counterparts,  but shall not be  effective
          until each party has executed at least one counterpart.

18.2      Each  counterpart  shall  constitute an original of this Agreement but
          all the  counterparts  shall  together  constitute  one  and the  same
          Agreement.

18.3      Delivery  by  facsimile  by any party of a duly  executed  counterpart
          shall be deemed to constitute  delivery of an original  counterpart of
          this  Agreement  and such  facsimile  copy  shall be  capable of being
          produced in evidence in court or for  registration  at any appropriate
          Registry or otherwise as an original  document by the party or parties
          to this Agreement to whom such facsimile is transmitted.

IN WITNESS  whereof this  Agreement  has been  executed as a deed the date first
above written



                                       21



                                   SCHEDULE 1

                                     PART 1

              DETAILS OF THE REGISTERED HOLDERS OF THE SALE SHARES

Column 1                       Column 2                           Column 3
Name and Address of Vendors    No. and class of Shares held       Consideration
---------------------------    ----------------------------       -------------
                                                               Cash       Shares

                                      [*]




----------
[*] = CERTAIN  INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL  TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.


                                       22



                                     PART 2

                          DETAILS OF THE OPTIONHOLDERS

Column 1                           Column 2

Names of Optionholders        Number           Date Granted         Option Price
----------------------        ------           ------------         ------------

                                   [*]



----------
[*] = CERTAIN  INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL  TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.



                                       23




                                     PART 3

                            DETAILS OF THE WARRANTORS

Column 1                                    Column 2

Name and Address of Warrantors              Maximum cap on liability
------------------------------              ------------------------



                                               [*]


----------
[*] = CERTAIN  INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL  TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.



                                       24



                                   SCHEDULE 2

                             DETAILS OF THE COMPANY


1.   Name:-                             C-Dilla  Limited

2.   Registered in England with limited liability under the Companies Act 1985

3.   Date of Incorporation:-            31 January 1992

4.   Registered Number:-                2683202

5.   Authorised Share Capital:-         (pound)1,326,000  divided  into:- 28,847
                                        "A"  Ordinary  Shares of 10 pence  each;
                                        150,000 "B" Ordinary  Shares of 10 pence
                                        each;  21,153 "C" Ordinary  Shares of 10
                                        pence each;  500,000 "D" Ordinary Shares
                                        of 10 pence each; 1,562,500 "E" Ordinary
                                        Shares  of 2  pence  each;  247,500  "F"
                                        Ordinary  Shares of 10 pence  each;  and
                                        1,200,000  Preference Shares of (pound)1
                                        each

6.   Issued Share Capital:-             "A" Ordinary Shares           28,847
                                        "B" Ordinary Shares          150,000
                                        "C" Ordinary Shares           21,153
                                        "D" Ordinary Shares          500,000
                                        "F" Ordinary Shares          247,500
                                        Preference Shares          1,200,000

7.   Registered Office:-                Woodley House, Crockhamwell Road
                                        Woodley Reading Berkshire RG5 3JP

8.   Accounting Reference Date:-        31 December

9.   Auditors:-                         Sheen Stickland


                                       25



10.  Directors:-

                                        Michael John Brooke
                                        Peter Alfred Newman
                                        Nils Erik Vilhelm Martensson
                                        Simon Hugh Verdon Acland
                                        Victor Viegas
                                        William Krepick
                                        Patrick Erik Nils Martensson

11.  Secretary:-                        Colin Vincent Austin Nunn


                                       26


                                   SCHEDULE 3

                                   WARRANTIES


1.        GENERAL

1.1       The  information  contained  in the  recitals  to this  Agreement  and
          Schedules 1, 2 and 4 is true complete and accurate in all respects and
          not  (whether  by  reason  of any  omission  or  otherwise)  untrue or
          misleading.

1.2       [intentionally left blank]

1.3       There is not outstanding any  indebtedness or other liability  (actual
          or contingent) owing by the Company to the Warrantors or so far as the
          Warrantors  are aware to the Vendors or any Director of the Company or
          any person connected with any of them.

1.4       None of the  Warrantors or any person  connected  with them has nor so
          far as the  Warrantors  are  aware  do any of the  Directors  have any
          interest,  direct or  indirect,  (i) in any  business  other  than the
          Business  which is or so far as the  Warrantors are aware is likely to
          be or become competitive with the Business or any proposed business of
          the  Company  or  (ii)  in any  Intellectual  Property  Rights  of the
          Company.

1.5       Copies of the  Memorandum  and Articles of  Association of the Company
          which are annexed to the  Disclosure  Letter are true and  complete in
          all respects and the register of members and other  statutory books of
          the Company have been properly  kept and contain a true,  accurate and
          complete  record of the matters which should be dealt with therein and
          no notice or allegation that any of the same is incorrect or should be
          rectified has been received.

1.6       All returns, particulars,  resolutions and other documents required to
          be filed  with or  delivered  to the  Registrar  of  Companies  by the
          Company  have been  correctly  and  properly  prepared and so filed or
          delivered within the time limits  contained,  mentioned or referred to
          in the Companies Act.

1.7       The number of Sale Shares set out in Schedule 1 Part 1 constitute  the
          whole of the issued share  capital of the Company which is not already
          owned by the  Purchaser  and  such  Sale  Shares  have  been  properly
          allotted and issued and are absolutely and  beneficially  owned by the
          Vendors as therein  set out and (other than the  Outstanding  Options)
          there  is no  option  or  warrant  or  convertible  security  over  or
          affecting,  and there is no mortgage,  charge,  pledge,  lien or other
          form of security or  encumbrance  or pre-emption or refusal rights on,
          over or affecting the Sale Shares or any unissued shares,  debentures,
          loan  capital  or other  securities  of the  Company  and  there is no
          agreement or  commitment to


                                       27


          give or create any of the  foregoing and no claim has been made by any
          person to be entitled to any of the foregoing.

1.8       The  Outstanding  Options set out in Schedule 1 Part 2 constitute  the
          only options over or affecting any unissued shares of the Company full
          details of which are set out in the Disclosure Letter.

1.9       The Company has not at any time:-

          (a)       repaid or agreed to repay or redeem  any shares of any class
                    of its  share  capital  or  otherwise  reduced  or agreed to
                    reduce its issued share capital or any class thereof; or

          (b)       capitalised or agreed to capitalise,  in the form of shares,
                    debentures  or other  securities or in paying up any amounts
                    unpaid on any shares,  debentures or other  securities,  any
                    profits or reserves of any class or  description  nor has it
                    passed or agreed to pass any resolution to do so.

1.10      So far as the  Warrantors  are aware no material  breach of any of the
          provisions of the Companies Act has been committed by the Company.

1.11      So far as the  Warrantors  are  aware  the  Company  has at all  times
          carried on its business and affairs in accordance  with its Memorandum
          and Articles of Association.

1.12      The Company has not given any power of attorney or any other authority
          (express  implied  or  ostensible)  to any  person  to enter  into any
          contract or  commitment  or do  anything on its behalf  which is still
          outstanding  or  effective  (other than any  authority of directors or
          employees to enter into routine trading contracts in the normal course
          of their duties).

1.13      The Company has not declared any dividends or other distributions.

1.14      The  Vendors and the  Warrantors  (as the case may be) have full power
          and  authority  and have taken all  action  necessary  to execute  and
          deliver and to exercise  their  rights and perform  their  obligations
          under this  Agreement  and each of the documents in the Agreed Form to
          be executed on or before Completion which constitute valid and binding
          obligations on each of the Vendors and the Warrantors (as the case may
          be) in accordance with their terms.

1.15      The  Vendors  are  entitled  to sell and  transfer  the full legal and
          beneficial  ownership in the Sale Shares free from all Encumbrances or
          other adverse claims to the Purchaser and such sale will not result in
          any  breach of or  default  under any  agreement  or other  obligation
          binding  upon the  Vendors  or any of them or any of their  respective
          property.


                                       28



1.16      There is no litigation,  arbitration,  prosecution,  administrative or
          other legal proceedings or dispute in existence or threatened  against
          any of the  Vendors  in  respect  of the Sale  Shares or the  Vendors'
          entitlement  to dispose of the Sale  Shares and the  Vendors  have not
          been  notified  of any  facts  which  might  give  rise  to  any  such
          proceedings or any such dispute.

1.17      The Company has not  exercised  nor purported to exercise or claim any
          lien  over  the  Sale  Shares  and no  call  on  the  Sale  Shares  is
          outstanding  and all the Sale  Shares are fully paid up or credited as
          fully paid up.

2.        [intentionally left blank]

3.        ACCOUNTS

3.1       The Accounts  comply with the  requirements  of the Companies Act, all
          other relevant statutes and all applicable SSAPs,  FRSs,  Consensus or
          Statement of Recommended  Practice issued by the Accounting  Standards
          Board in England and Wales or any  committee of it or body  recognised
          by it in force on the  Balance  Sheet  Date;  have  been  prepared  in
          accordance with generally  accepted  accounting  principles and on the
          same  basis as the  corresponding  accounts  for the  preceding  three
          financial  years;  are accurate in all material  respects;  and give a
          true and fair  view of the  state of  affairs  of the  Company  at the
          Balance  Sheet  Date  and of the  profits  or  losses  for the  period
          concerned and as at that date make:

          (a)       proper provision for all actual liabilities;

          (b)       proper   provision   (or  note  in   accordance   with  good
                    accountancy   practice)   for  all  deferred  or  contingent
                    liabilities (whether liquidated unliquidated or disputed);

          (c)       proper provision for all bad and doubtful debts;

          (d)       proper provision for all capital commitments;

          (e)       proper provision for all Tax liabilities;

3.2       Full  provision  or reserve has been made in the Accounts for Taxation
          liable to be  assessed on the Company or for which it is or may become
          accountable in respect of:

          (a)       profits gains or income (as computed for Taxation  purposes)
                    arising  or  accruing  or  deemed  to arise or  accrue on or
                    before the Balance Sheet Date;


                                       29



          (b)       any  transactions  effected on or before the  Balance  Sheet
                    Date or provided for in the Accounts; and

          (c)       distributions  made or deemed  to be made on or  before  the
                    Balance Sheet Date or provided for in the Accounts.

3.3       Proper provision or reserve for deferred taxation has been made in the
          Accounts.

3.4       The  profits or losses of the Company  for the three  financial  years
          ended on the Balance  Sheet Date (as  disclosed in the Accounts and in
          the audited accounts of the Company for such previous periods) and the
          trend of profits or losses  thereby  shown have not (except as therein
          disclosed)  been affected to a material extent by  inconsistencies  of
          accounting practice, by the inclusion of non-recurring items of income
          or expenditure by  transactions  entered into otherwise than on normal
          commercial  terms or by any other  factor  rendering  such  profits or
          losses for all or any of such periods exceptionally high or low.

3.5       The Management  Accounts have been prepared on a basis consistent with
          the  management  accounts  prepared in the year  preceding the Balance
          Sheet Date and give a  reasonable  view of the state of  affairs,  and
          profit (or loss) of the Company as at and for the period in respect of
          which they have been prepared.

4.        CURRENT FINANCIAL AFFAIRS

4.1       The  Company had no  outstanding  capital  commitments  at the Balance
          Sheet Date and has not since then  incurred or agreed to incur capital
          expenditure  or  commitments  or disposed of capital  assets  having a
          market value in excess of (pound)11,000  per item or (pound)100,000 in
          aggregate.

4.2       Since the Balance Sheet Date:

          (a)       the Company has not paid or  declared  any  dividend or made
                    any  payment  or  disposal  which  is  or  is  treated  as a
                    distribution for the purposes of TA;

          (b)       the  Company has not repaid any  indebtedness  in advance of
                    its stated  maturity and no event has  occurred  which would
                    entitle  any third party to call for  repayment  of any part
                    thereof prior to its normal maturity date.

4.3       Save  for the  financial  facilities  and  borrowings  of the  Company
          details of which are set out in the Disclosure Letter, the Company has
          no  borrowings  or  obligations   having  the  commercial   effect  of
          borrowings.


                                       30



4.4       There are no debts owing by to the Company other than debts which have
          arisen in the  ordinary  course of the  Business,  nor has the Company
          lent any money which has not been repaid.

4.5       The Company is not a party to any option or  pre-emption  right,  or a
          party to any guarantee,  suretyship,  comfort letter or any obligation
          (whatever called) to pay, provide funds or take action in the event of
          default in the  payment  of any  indebtedness  of any other  person or
          default in the performance of any obligation of any other person.

4.6       The Company has not engaged in any borrowing or financing not required
          to be reflected in the Accounts.

5.        CURRENT TRADING AFFAIRS

5.1       Since the Balance Sheet Date:

          (a)       the  Company has  carried on its  business  in the  ordinary
                    course so as to maintain the same as a going concern and has
                    not carried on any activity other than its usual business;

          (b)       the Company has not acquired  any asset for a  consideration
                    in excess of (pound)11,000.

5.2       So far as the  Warrantors  are  aware  the  Company  has at all  times
          conducted its business and affairs in all respects in accordance  with
          all  applicable  laws and  regulations.  The Company has  obtained and
          complied with all statutory  municipal and other licences consents and
          requirements  applicable  to its  business  as now  carried on and all
          terms  and  conditions  of any  licences  and  consents  necessary  or
          desirable to the carrying on of such  business  have at all times been
          observed and  complied  with and the  Warrantors  are not aware of any
          intended  or  contemplated  refusal  to  renew or  terminate  any such
          licence or consent.

5.3       The Warrantors have not and so far as the Warrantors are aware neither
          the Company nor the  Directors  have  committed  or done any breach of
          contract  or  statutory  duty or any other act which  could  lead to a
          claim for  compensation  or damages  specific  performance  injunction
          set-off or any other civil or criminal claim of sanction being made or
          brought  against him or it as the case may be or which would otherwise
          adversely affect the Business.

5.4       So far as the Warrantors are aware no substantial customer or supplier
          of the Company (that is to say a supplier or customer  whose  supplies
          to or purchases from the Company of goods or services have represented
          more than ten per cent in value of all supplies to or  purchases  from
          the Company during either or both of the calendar years 1997 and 1998)
          has during the period of 12 months prior to this  Agreement  ceased to
          trade with or 


                                       31



          substantially  reduced  the volume of its trade with the  Company  and
          during  such  period  the  terms  of trade of the  Company  with  such
          supplier or customer have not  significantly  changed to the detriment
          of the  Company  and  the  Warrantors  are not  aware  that  any  such
          cessation  or  substantial  reduction  in trade or  change in terms of
          dealing is likely after Completion.

5.5       So far as the  Warrantors  are  aware  the  Company  has  not  sold or
          supplied  products  which are, or were, or will become,  unfit for the
          purpose  for which  they were  intended  or which do not comply in any
          material respect with any warranties or  representations  expressly or
          impliedly  made by the  Company  or with all  applicable  regulations,
          standards and requirements in respect thereof.

5.6       The Company is not engaged either on its own account or vicariously in
          any suit action litigation  arbitration or tribunal proceedings or any
          governmental  or  official  investigation  or inquiry and no such suit
          action litigation arbitration or tribunal proceedings or investigation
          or inquiry or other dispute is pending or threatened by or against the
          Company  and  so  far  as  the  Warrantors  are  aware  there  are  no
          circumstances  likely  to  lead to any  such  suit  action  litigation
          arbitration  or  tribunal  proceedings  or  governmental  or  official
          investigation or inquiry or other dispute.

5.7       There is not now  subsisting  and has not at any time  within the last
          six years been any debt owing by the Company to any director or person
          beneficially  interested  in any  part  of the  share  capital  of the
          Company or any person  connected  with any such  person or  associated
          with any such person.

5.8       There is not now  subsisting  and has not at any time  within the last
          six years been any contract or arrangement (whether of the nature of a
          loan or otherwise) to which the Company is or was a party in which any
          director of or person beneficially interested in any part of the share
          capital of the Company or any person connected with any such person or
          associated with any such person was directly or indirectly interested.

6.        ASSETS

6.1       All the  undertaking  of the  Company  and all assets  included in the
          Accounts  or acquired  by the  Company  since the  Balance  Sheet Date
          (other  than  current  assets  subsequently  sold or  realised  in the
          ordinary course of business) and subject to the above all other assets
          now used by the Company in the  Business are  absolutely  owned by the
          Company both legally and  beneficially  and are in its  possession and
          under its control and none is the subject of any mortgage,  debenture,
          charge, lien, pledge, option,  factoring  arrangement,  hire purchase,
          leasing,  lease purchase or credit-sale agreement or any agreement for
          conditional  sale or  sale by  instalments  or any  other  encumbrance
          whatsoever  (or any  agreement to grant or create any of the same) nor
          subject to any 


                                       32



          agreement or arrangement  whereby the title to any goods or any rights
          in the  proceeds  of sale of any  goods is or may be  reserved  to the
          seller of the goods or to any third party.

6.2       So far as the  Warrantors  are aware The  Company is not a party to or
          subject  to  any  agreement,  transaction,   obligation,   commitment,
          understanding, arrangement or liability which:-

6.2.1     involves   or  is  likely  to   involve   obligations,   restrictions,
          expenditure or receipts of an unusual,  onerous or exceptional  nature
          and not in the ordinary course of the Company's Business; or

6.2.2     is any way  otherwise  than in the  ordinary  course of the  Company's
          Business.

7.        JOINT VENTURE AND PARTNERSHIPS

7.1       The  Company is not,  nor has  agreed to become,  a party to any joint
          venture or consortium or partnership arrangement or agreement.

7.2       The Company  does not conduct  and has not  conducted  any part of the
          Business  through a branch agency or permanent  establishment  outside
          the United Kingdom.

8.        AGREEMENTS RESTRICTING BUSINESS

          Other than in respect of the  Material  Contracts  listed in Part C of
          the Index to the  Disclosure  Letter the Company is not a party to any
          agency,  distributorship,   marketing,  purchasing,  manufacturing  or
          licensing  agreement or  arrangement,  or any  restrictive  trading or
          other  agreement  or  arrangement,  pursuant  to which any part of the
          Business  is carried on or which in any way  restricts  its freedom to
          carry on the  Business  in such  manner as it thinks  fit or to use or
          exploit  any of the assets of the  Company in any part of the world in
          such manner as is thought fit.

9.        GRANTS

          There are no grants,  subsidies and other similar  payments  which the
          Company has received which (if repayable) have not been repaid in full



                                       33


10.       ENVIRONMENTAL LIABILITIES

10.1      The Company has not received notice that it has failed to comply with,
          or  has  inadequate   facilities  to  continue  to  comply,  with  any
          legislation (both primary and secondary) relating to the protection of
          the environment as now in force.

10.2      So far as the  Warrantors  are aware the use of the  Property  and any
          other properties which are currently occupied or otherwise used by the
          Company  in  connection  with  the  Business  and  all  machinery  and
          equipment  therein and the conduct of any Business therein complies in
          all respects  with the  Factories  Act 1961,  the  Offices,  Shops and
          Railway Premises Act 1963, the Fire Precautions Act 1971, the Health & Safety at Work Act 1974 the Planning Acts, the COSHH Regulations,  the
          Control of Pollution  Act 1974 and the  Environmental  Protection  Act
          1990  and  with  all  rules,  regulations  and  delegated  legislation
          thereunder and all necessary licences and consents required thereunder
          have been obtained.

11.       LICENCES AND CONSENTS

11.1      So far as the  Warrantors  are  aware the  Company  has  obtained  all
          necessary Open Individual Export Licences from the Department of Trade
          and Industry and filter  licence  agreements  and all other  necessary
          licences  and  consents  required  for the proper  carrying  on of the
          Business in each case necessary for the performance of its Business as
          contemplated  by this Agreement and all of the foregoing  licences and
          consents are valid and subsisting.

11.2      The Company has not received notice that it is in breach of any of the
          terms and conditions of any licences or consents; there are no factors
          known  to  the  Warrantors   that  might  in  any  way  prejudice  the
          continuation, or renewal, of any licence or consents.

11.3      The Company has not been notified  that any  agreement or  arrangement
          which  it is a party  to or  directly  or  indirectly  concerned  with
          (whether or not legally  binding) or that any course of conduct  which
          it is pursuing is  registerable  under or  prohibited by or capable of
          giving  rise to any  investigation  by the  Director  General  of Fair
          Trading or reference to the monopolies and merger commission  (whether
          pursuant to the Treaty of  Amsterdam,  The Fair Trading Act 1973,  The
          Resale Prices Act 1976, The Restrictive  Trade Practices Acts 1976 and
          1977, The Competition  Acts 1980 and 1998, The Trade  Descriptions Act
          1968,  The Consumer  Credit Act 1974 or  otherwise)  or  prohibited as
          incompatible with the European Community legislation and in particular
          Articles  85 and 86 of The  Treaty  of  Amsterdam  or with  any  other
          anti-trust legislation.



                                       34



12.       EMPLOYEES

12.1      The  particulars  shown in the  Annexure of  Employees  annexed to the
          Disclosure  Letter show all remuneration  payable and pension benefits
          and other  benefits  provided  which the  Company  is bound to provide
          (whether now or in the future) to each officer, Employee or consultant
          of the  Company or any person  connected  with any such person and are
          true and  complete  and  include  particulars  of all  profit  sharing
          incentive  and  bonus  arrangements  to which the  Company  is a party
          whether legally binding on the Company or not. The Company's  standard
          terms of engagement of employees is contained in the Disclosure Letter
          together with details of any changes (other than to salary) thereto.

12.2      No  present  Employee  of the  Company  has given or  received  notice
          terminating his agreement except as expressly  contemplated under this
          Agreement.

12.3      The Company has not given notice of any redundancies to any Employee.

12.4      The  Warrantors  are not aware of any  outstanding  claim  against the
          Company by any person who is now or has been an officer or Employee of
          the Company or any dispute  between the Company and a material  number
          or class of its Employees and no payments are due by the Company under
          the provisions of the Employment Rights Act 1996.

13.       INTELLECTUAL PROPERTY

13.1      Details of all  Intellectual  Property Rights  registered or for which
          application for  registration has been made in the name of the Company
          are set out in the Disclosure  Letter.  All such rights are solely and
          beneficially  owned by the  Company,  valid and  enforceable,  and (in
          respect of the  registered  rights) all renewal and  maintenance  fees
          have  been  paid  and  all  steps  necessary  for the  prosecution  of
          applications taken.

13.2      So far as the  Warrantors  are aware details of all licences  (whether
          exclusive or  non-exclusive)  granted by any third party in respect of
          the  Intellectual  Property Rights of the Company  (whether written or
          oral,  formal or informal,  and including  licences of software (other
          than office  software)  and/or  know-how,  collaboration  and research
          agreements, and any Government or University funding arrangements) are
          set out in the Disclosure Letter. There has been no breach (whether by
          the Company or so far as the  Warrantors is aware by such third party)
          of the terms of any such licence or of any licence  relating to office
          software  used by the  Company  or of any  confidentiality  agreements
          entered into by the Company with any third party. Any licences granted
          to third parties have been entered into in the ordinary  course of the
          Company's business.


                                       35



13.3       So far as the Warrantors are aware the  Intellectual  Property Rights
           disclosed against warranties 13.1 and 13.2 constitute all such rights
           required for the conduct of the Business as at the Completion Date.

13.4       The activities of the Company and its employees in the conduct of the
           Business  as  now  carried  on  and  any  products   currently  under
           development or contemplated do not infringe the Intellectual Property
           Rights of any third party,  and there has been no actual or suspected
           infringement by any third party of any of the  Intellectual  Property
           Rights of the Company.

13.5       The Company has taken all  reasonable  steps  required to protect the
           Company's rights in confidential information and trade secrets of the
           Company or provided by any third party to the Company.

13.6       There are no actual and the  Warrantors  have not received  notice of
           any  potential  challenges  or  disputes  relating  to the  validity,
           subsistence or ownership of any of the  Intellectual  Property Rights
           of the  Company,  nor any  opposition  or  claim  for  revocation  or
           rectification of any of the registered  Intellectual Property Rights.
           The  Company  has no  liability  to pay  compensation  to any  person
           pursuant  to s.40 and  s.41  Patents  Act  1977 or any  corresponding
           legislation in any other jurisdiction.

13.7       So far as the Warrantors are aware the Company's products comply with
           all regulations and standards relevant to their intended applications
           in any  territory in which the Company is  specifically  requested to
           participate  in  marketing  its products or where the  Purchaser  has
           specifically  drawn  the  Company's  attention  to  requirements  for
           compliance with such regulations or standards.

14.       TAXATION

14.1      Residence

14.1.1    The Company is and always has been resident in the United  Kingdom for
          the purposes of the TA.

14.1.2    The Company is not and has never been either a dual  resident  company
          or a dual resident investment company within the meaning of the TA.

14.2      Returns

14.2.1    All returns  computations  and payments which should have been made or
          given by the Company for the  purposes of Taxation  were made or given
          within  the  requisite  periods  and have been  correct  and made on a
          proper  basis  and all  notices  accounts  and  information  which the
          Company  ought to have made have been made and none


                                       36



          of such  returns or  computations  or  information  is disputed by the
          Inland  Revenue,  H.M.  Customs and Excise or other  fiscal  authority
          concerned  and so far as the  Warrantors  are  aware  there is no fact
          which is  likely  to  occasion  of any  dispute  or of any  claim  for
          Taxation in respect of any financial  period down to and including the
          Management  Accounts Date not provided for in the Management  Accounts
          and the  Warrantors  is not aware of any matter which may lead to such
          dispute.

14.2.2    The  Company  has   complied  in  all  material   respects   with  all
          requirements  of  the  Corporation  Tax  Self  Assessment  legislation
          contained  in  paragraphs  21 to 23 of  Schedule 18 to the Finance Act
          1998.

14.3      Close Companies

14.3.1    The Company has not since the Balance Sheet Date made and is not to be
          regarded  as  having  made or given  any such  loan or  advance  as is
          mentioned  in Section  420 421 or 422 of the TA nor has it released or
          written off or agreed to release or write off the whole of any part of
          any such loan or advance.

14.3.2    The  Company  is not and has  never  been a close  investment  holding
          company within the meaning of Section 13A of the TA.

14.3.3    No distribution within Section 418 of the TA has ever been made by the
          Company.

14.4      Penalties and Interest

          Save as provided for in the  Management  Accounts the Company has duly
          paid or fully provided for all Taxation for which it is liable and has
          not since its  incorporation  paid or become liable to pay any penalty
          or interest charged in respect of Taxation not duly paid and there are
          no  circumstances  in which  any such  penalty  or  interest  could be
          charged  against it in respect of any period  prior to the  Completion
          Date.

14.5      Transactions involving clearance

          The  Company  has not  entered  into or been a party  to or  otherwise
          involved in any transaction  scheme or arrangement to which any of the
          following  provisions  have  been  or  could  be  applied  other  than
          transactions in respect of which all necessary clearances have


                                       37



          been  obtained  on the basis of full and  accurate  disclosure  to the
          Inland  Revenue  and/or  the  Special  Commissioners  of all facts and
          considerations  relating  thereto  material  to be known to the Inland
          Revenue and/or the Special Commissioners:

          the TCGA       Section 139
          the TA         Sections 703-709
          the TA         Section 776
          the TCGA       Sections 135-138
          the TA         Section 215

14.6      The  Company  has not made (and  will not be deemed to have  made) any
          elections  under  Section 524 and 534 of the TA (lump sum receipts for
          patent and copyright).

14.7      Employees and tax

14.7.1    Save  as  provided  for in the  Management  Accounts  all  income  tax
          deductible  and payable  under the PAYE system has, so far as required
          to be deducted,  been  deducted  from all payments made by the Company
          and all amounts due to be paid to the Inland Revenue prior to the date
          hereof have been so paid.

14.7.2    all deductions and payments required to be made in respect of National
          Insurance contributions (including employers' contributions) have been
          so made.

14.7.3    Proper records have been  maintained in respect of all such deductions
          and payments and all regulations applicable thereto have been complied
          with.

14.8      [intentionally left blank]

14.9      Value Added Tax

14.9.1    The  Company  is not and has not been for value  added tax  purposes a
          member of any group of companies.

14.9.2    So far as the  Warrantors  are aware the Company has complied with all
          legislation,  regulations,  notices orders and  directions  concerning
          value added tax,  including  the making of all  necessary  returns and
          payments  required  by law to  H.M.  Customs  and  Excise  within  the
          prescribed time limits and has maintained up-to-date records, invoices
          and other documentsas legally required to do so.

14.9.3    Save as  provided  in the  Management  Accounts  the Company is not in
          arrears  with any  payments  or  returns or  notifications  under such
          legislation,  regulations  or  notices  or liable to any  abnormal  or
          non-routine payment or any forfeiture penalty interest or surcharge or
          to the operation of any penal provisions contained therein.


                                       38



14.10     [intentionally left blank]

14.11     Tax Avoidance

          The  Company  has not  entered  into or been a party to any  scheme or
          arrangement or schemes or  arrangements  designed partly or wholly for
          the purpose of illegally avoiding Taxation.

14.12     Inheritance Tax, Capital Transfer Tax and Capital Gains

14.2.1    There is no outstanding Inland Revenue Charge under Section 237 of the
          Inheritance  Tax Act 1984 over any of the assets of the Company or any
          of the Sale Shares.

14.2.2    No person has by virtue of Section 212(1) of the  Inheritance  Tax Act
          1984 any power of sale  mortgage  or charge in  respect  of any of the
          assets of the Company or any of the Sale Shares.

14.13     [intentionally left blank]

14.14     Roll-over Relief

          The Company has made no claim under Sections 152 to 156 (inclusive) or
          Section 158 of the TCGA or Section 276 of the TA and no such claim has
          been made by any other  company  which  affects  or could  affect  the
          amount or value of the  consideration for the acquisition of any asset
          by  the  Company  taken  into  account  in  calculating  liability  to
          corporation  tax on  chargeable  gains  or  any  allowable  loss  on a
          subsequent disposal.

14.15     [intentionally left blank]

14.16     Premiums

          The Company has not  effected or entered into any act  transaction  or
          arrangement  of any nature  whereby it has  incurred or may  hereafter
          incur any liability  under or by virtue of Sections 34 35 36 and 37 of
          the TA  (treatment of premiums  etc) and pending  Completion  will not
          effect or enter into any such act transaction or arrangement.

14.17     No  Taxation  is or may become  payable  by the  Company  pursuant  to
          Section 190 of the TA in respect of any chargeable  gain which accrued
          or will accrue  prior to  Completion  and the Company  will at no time
          within the two years ending at Completion have  transferred any assets
          other than trading  stock to any company which at the time of disposal
          was a member  of the same  group (as  defined  in  Section  170 of the
          TCGA).


                                       39



14.18     Company reconstruction or amalgamation

          The Company has not been a party to or involved in any share for share
          exchange nor any scheme of  reconstruction or amalgamation such as are
          mentioned  in  Sections  135 and 136 of the TCGA or Section 139 of the
          TCGA under which shares or debentures have been issued or any transfer
          of assets effected.

14.19     Chargeable Debts

          No gain  chargeable to  corporation  tax will accrue to the Company on
          the  disposal  of any debt owing to the  Company not being a debt on a
          security.


14.20     Claims by the Company

          The  Company  has made no claim in the last six years under any of the
          following:-

14.20.1   Section 279 of the TCGA (foreign assets; delayed remittances);

14.20.2   Section 24 of the TCGA (assets of negligible value);

14.20.3   Section  280  of  the  TCGA  (tax  on  chargeable   gains  payable  by
          instalments);

14.20.4   Section 584 of the TA (unremittable  income arising outside the United
          Kingdom)  or  Section  585 of  the  TA  (relief  from  tax on  delayed
          remittances);

14.20.5   Section 140 of the TCGA  (postponement of charge on transfer of assets
          to non-resident company).

14.21     [intentionally left blank]

14.22     General

14.22.1   No  liability  of the Company to Taxation has arisen since the Balance
          Sheet Date but prior to the Completion  Date save for  corporation tax
          payable in respect of normal  trading  profits  earned by it or income
          tax   deducted   under  PAYE   regulations   or   national   insurance
          contributions  or Value  Added  Tax or  sickness  pay for  which it is
          accountable to the Inland Revenue,  Customs & Excise or other relevant
          authority and which has where appropriate been deducted or charged and
          where due paid to the Inland Revenue or such other relevant  authority
          where such liability  arises from or in respect of any matter or thing
          done  outside  the  ordinary  course of  business of the Company as at
          Completion.


                                       40



14.22.2.  All documents in the possession of the Company or to the production of
          which it is entitled and which  attract  stamp or transfer duty in the
          United Kingdom or elsewhere have been properly stamped.

15.       PROPERTIES

15.1      The  Properties  are  occupied or used by right of  ownership or under
          lease or licence, the terms of which permit their occupation or use by
          the  Company  as  occupied  or  used  at  the  Completion   Date.  The
          information  contained  in the  Disclosure  Letter as to the tenure of
          each of the  Properties  and the principal  terms of the tenancies and
          licences  subject to and with the benefit of which the  Properties are
          held the rents currently payable and the dates of the next rent review
          are accurate in all respects.

15.2      The Company has not received  notice that any  licences,  consents and
          approvals  required from the landlords or any superior landlords under
          any leases or licences of the Properties for the proper carrying on of
          the Business have not been obtained or are otherwise than valid and in
          full force and the  covenants  on the part of the tenant  contained in
          the  licences,  consents and  approvals  have been duly  performed and
          observed.

15.3      The  Properties  as  described  in Schedule 4 are the only  properties
          owned,  controlled  or occupied by the Company or in which the Company
          has  any  interest   (including   rights  under  options,   rights  of
          pre-emption or other contractual relationship).

15.4      The Company has in its possession or control all documents of title in
          relation to the  Properties  which  consist of original  documents  or
          properly examined abstracts.

15.5      The Company has  exclusive  vacant  possession  and  occupation of the
          Properties  free from material  encumbrances  or third party rights of
          any kind  whatever  save as set out in the  Disclosure  Letter and all
          covenants  restrictions  stipulations or other  encumbrances have been
          and are being  properly  performed and observed and complied with. All
          rents,  service charges insurance premiums and outgoings affecting the
          Properties have been promptly paid and none are outstanding.

15.6      So  far  as  the   Warrantors   are  aware  there  are  no  covenants,
          restrictions  obligations  conditions  or  stipulations  affecting the
          Properties  or any part  thereof  which are of an  onerous  or unusual
          nature which conflict with the present or proposed user thereof or the
          user thereof for which planning permission has been obtained or sought
          or which  materially  affect the value of the  Properties  of any part
          thereof.

15.7      No  sub-lease,  tenancy  or licence  has been  granted or agreed to be
          granted to any third  party in respect of the  Properties  or any part
          thereof.


                                       41



15.8      All buildings or other erections on the Properties or any part thereof
          are in good repair and condition and are fit for the purpose for which
          they are at  present  used and there  are no  structural  problems  in
          respect of the Properties  and no deleterious  substances not approved
          by any relevant Code of Practice have been used in the construction of
          the  Properties  and the Company has no liability  for any clean-up or
          removal costs in relation to environmental  matters in relation to the
          Properties.

15.9      The Company  has not been the tenant of or a  guarantor  in respect of
          any leasehold property other than the Properties.

15.10     There are no  mortgages  or charges  legal or  equitable  specific  or
          floating  affecting the  Properties  nor does any person have or claim
          any lien on the Properties or the documents of title.

15.11      The Company has not received notice of any compulsory purchase orders
           or  resolutions  affecting any of the  Properties or any proposal for
           such an order or resolution.

16.       BORROWINGS AND FACILITIES

16.1      Full details of all limits on the Company's  bank  facilities  and all
          borrowings of the Company are set out in the Disclosure Letter and the
          Company  is not in  breach  of any of  their  terms  and  none of such
          facilities or terms of borrowing will be terminated as a result of the
          entry into this Agreement.

16.2      Full details of all  Encumbrances  granted by the Company or affecting
          its undertaking or assets are set out in the Disclosure Letter.

17.       INSOLVENCY

17.1      No  administrator,   administrative  receiver,  receiver,  manager  of
          assets,  liquidator  or  any  other  similar  officer  has  ever  been
          appointed  in  respect  of the  whole  or any  part of the  assets  or
          undertaking  of the  Company  and no  order  has been  made,  petition
          presented, resolution passed or meeting convened at which a resolution
          will be  proposed  for the  purpose  of the  making  of any  order  in
          relation to administration, administrative receivership, receivership,
          liquidation,  management of assets or any other  similar  situation of
          the Company.

17.2      The Company is not insolvent  nor stopped or suspended  payment of its
          debts  nor  become  unable  to pay its debts as they fall due (as such
          expression is defined in either  sub-section (1)(a) to (d) (inclusive)
          or sub-section (2) of Section 123 of the Insolvency Act 1986).


                                       42



17.3      No voluntary  arrangement  (as referred to in the Insolvency Act 1986)
          or scheme of arrangement as regards its creditors has been proposed by
          the Directors or is in operation in relation to the Company.

17.4      No unsatisfied  judgement  order or award is  outstanding  against the
          Company.

17.5      No written  demand under Section  123(1)(a) of the Insolvency Act 1986
          has been made against the Company.

17.6      No distress or execution has been levied on or other process commenced
          against any asset of the Company.

17.7      The  Company  has not entered  into any  transaction  nor been given a
          preference  to which  sections 238, 239 or 423 of the  Insolvency  Act
          1986 apply or which may otherwise be liable to be set aside or avoided
          for any reason.




                                       43




                                   SCHEDULE 4

                                 THE PROPERTIES


Leasehold  property  known as second  floor,  Woodley House  Crockhamwell  Road,
Woodley  held  under a lease  dated  1st  November  1996 and made  between  Peel
Investmenets  (North)  Limited and the Company for a term of five years from [ ]
1996.



                                       44


                                   SCHEDULE 5

                            LIMITATIONS ON LIABILITY


1.1       No claim may be made against the Warrantors for any breach of Warranty
          (a "Claim") unless notice of such claim is served on the Warrantors in
          writing,  specifying in reasonable detail the nature of such claim and
          the  amount  claimed  as  soon as  reasonably  practicable  after  the
          Purchaser becomes aware thereof.

1.2       The Purchaser  shall and shall procure that the Company shall promptly
          reimburse to the  Warrantors  all amounts (not exceeding the aggregate
          sum  paid by the  Warrantors  (or the  value  of  Macrovision  options
          surrendered  pursuant to clauses  5.12 and 5.13 of this  Agreement  in
          accordance with the valuations set out in those clauses) in respect of
          any Claim less the  Purchaser's  costs and expenses in enforcing  such
          recovery and any Taxation  thereon) paid by the  Warrantors in respect
          of any Claim which is  subsequently  recovered by the Purchaser or the
          Company as the case may be from any  insurance  company or other third
          party (other than another  company in the  Purchaser's  Group) and the
          Purchaser  hereby  undertakes  to use and to procure  that the Company
          uses all  reasonable  endeavours to enforce any rights to recover such
          sums  from  insurers  or  such  other  third  parties  subject  to the
          Warrantors indemnifying and securing the Purchaser and the Company (to
          their  reasonable  satisfaction)  against  any  reasonable  costs  and
          expenses  liabilities  penalties  and  fines  which  may  be  incurred
          thereby.

1.3       No Claim shall be made against the Warrantors:

          (a)       to the  extent  that the  breach  giving  rise to a possible
                    Claim  occurs or is  increased  by reason of the coming into
                    force  of any  legislation  not in force at the date of this
                    Agreement  or the  withdrawal  of any relief,  allowance  or
                    concession  available  at the  date  of this  Agreement  and
                    reliance on which by the  Company  has been  notified to the
                    Purchaser in the Disclosure  Letter (where such  legislation
                    or withdrawal  purports to be effective  retrospectively  in
                    whole  or in  part)  or as a  result  of  any  retrospective
                    increase  in any rate of Taxation or by reason of any change
                    occurring  after  the  date of  this  Agreement  in  Revenue
                    practice or by reason of any change occurring after the date
                    of this  Agreement  in any  principal  of common law in each
                    case with retrospective effect;



                                       45


          (b)       based upon a liability  which is contingent  only unless and
                    until:-

                    (i) the  Purchaser  notifies the  Warrantors of the claim in
                    accordance with paragraph 1.1 above;

                    (ii)  if  the  claim  is  disputed  by  the  Warrantors  the
                    Purchaser obtains a written opinion from counsel of at least
                    10 years standing advising that the contingent  liability is
                    likely to become an actual liability.

1.4       If any matter comes to the notice of the  Purchaser or a member of the
          Group the Purchaser  shall and shall procure that each relevant member
          of the Group shall:

          (a)       give written  notice thereof to the Warrantors in accordance
                    with paragraph 1.1 ;

          (b)       (save where it is not reasonably practicable to consult with
                    the  Warrantors  or having made all  reasonable  attempts to
                    consult with the Warrantors,  in the Purchaser's opinion the
                    Warrantors   are   unreasonably   withholding   or  delaying
                    agreement) not make any admission of liability, agreement or
                    compromise to or with any person in relation thereto without
                    prior consultation with or the prior agreement in writing of
                    the Warrantors;

          (c)       give the Warrantors and their professional advisers (subject
                    to their execution of any  confidentiality  undertakings the
                    Purchaser may reasonably  require)  reasonable access during
                    normal  business  hours to the premises and personnel of the
                    Company (but without unreasonably disrupting the business of
                    the Group) and to any relevant chattels, accounts, documents
                    and  records   within  the  possession  or  control  of  the
                    Purchaser  or the Group to enable the  Warrantors  and their
                    professional  advisers to examine such  chattels,  accounts,
                    documents  and records  and to take  copies and  photographs
                    thereof  at their  own  expense  subject  to the  Warrantors
                    indemnifying  and securing the Purchaser and the Company (to
                    their  reasonable   satisfaction)   against  any  costs  and
                    expenses  liabilities  penalties  and  fines  which  may  be
                    incurred thereby;

          (d)       take  such   reasonable  and   appropriate   action  as  the
                    Warrantors may reasonably request to avoid, dispute, resist,
                    compromise or defend any such claim .

1.5       Notwithstanding anything expressed or implied in this Agreement to the
          contrary,  any  payment by the  Vendors  pursuant  to a Claim shall be
          treated  for  all  purposes  by  the  parties  as a  reduction  in the
          consideration  payable  for the Sale  Shares  and  clause [3] shall be
          modified accordingly.

1.6       The Purchaser shall only be entitled to recover once for the same loss
          suffered as a result of a breach of one or more of the Warranties.


                                       46



1.7       The Purchaser shall procure that all reasonable  steps are taken by it
          and each  member  of the  Group  to  mitigate  any  loss or  liability
          pursuant to its obligation  existing at law generally which might give
          rise to a false Claim.

1.8       The liability of the Warrantors under or in relation to the Warranties
          shall  determine  on the second  anniversary  of the  Completion  Date
          except in respect of any claim of which the Purchaser shall have given
          written notice to the Warrantors prior to that date.

1.9       The  Purchaser  confirms  that at the  Completion  Date  other than in
          relation to the matters set out in the  Disclosure  Letter it does not
          have actual knowledge of any fact or matter which it believes or knows
          (and without  making  further  enquiry or linking  together any two or
          more different  facts)  constitutes a breach of any of the Warranties.
          For the purposes of this  paragraph 1.9 the "actual  knowledge" of the
          Purchaser  shall be  construed  as  meaning  the actual  knowledge  of
          William Krepick, Victor Viegas and Brian Dunn.



                                       47




SIGNED (but not delivered until the date    )
hereof) as a DEED by the said               )
PETER ARTHUR NEWMAN.................        )        /s/ Peter Newman
in the presence of:-                        )        ----------------


WITNESS:

Name:    /s/ illegible...............
         ----------------------------

Address: London WC1X.........

         ...........................

Occupation: Trainee Solicitor.......


SIGNED (but not delivered until the date    )
hereof) as a DEED by the said               )
DR KEITH GEORGE WARREN...........           )       /s/ Keith Warren
in the presence of:-                        )       ----------------

WITNESS:

Name:   /s/ illegible...............
        ----------------------------

Address: London WC1X................

             .......................

Occupation:  Trainee Solicitor......


EXECUTED (but not delivered until the )
date hereof) as a DEED by             )
IPR INDUSTRIES LIMITED                )
acting by                             )

                           Director:              /s/ Nils Martensson...........
                                                  ------------------------------
                           Director/Secretary:    /s/ Patrick Martensson........
                                                  ------------------------------


                                       48



EXECUTED (but not delivered until the ) 
date hereof) as a DEED by             ) 
COINSHIRE LIMITED                     ) 
acting by                             ) 
                                      

                           Director:              /s/ Mike Brooke...............
                                                  ------------------------------

                           Director/Secretary:    ..............................

EXECUTED (but not delivered until the ) 
date hereof) as a DEED by             ) 
(QUESTER VCT PLC)                     ) 
acting by                             ) 
                                      
                           Director:                /s/ Simon Acland............
                                                  ------------------------------
                           Director/Secretary:      /s/ James Abel..............
                                                  ------------------------------

EXECUTED (but not delivered until the ) 
date hereof) as a DEED by             ) 
ABINGTON VENTURES                     ) 
LIMITED PARTNERSHIP                   ) 
acting by its General Partner         )
Abingworth Ventures (G.P.) Limited    

                           Director:                /s/ Stephen Bunting.........
                                                  ------------------------------
                           Director/Secretary:      /s/ David Leathers..........
                                                  ------------------------------

EXECUTED (but not delivered until the ) 
date hereof) as a DEED by             ) 
ABINGTON VENTURES                     ) 
LIMITED PARTNERSHIP "B"               ) 
acting by its General Partner         )
Abingworth Ventures (G.P.) Limited    

acting by

                           Director:              /s/ Stephen Bunting...........
                                                  ------------------------------
Director/Secretary:              /s/ David Leathers...........
                                ------------------------------


                                       49



EXECUTED  (but not delivered  until the  )
date hereof) as a DEED by  ALTA-BERKELEY )
111 CV acting by Albert Van Herk         )
                                         )
                           Director:              /s/ Albert Van Herk...........
                                                  ------------------------------
         Alta Berkeley Associates BV
         General Partner
                           Director/Secretary:    ..............................

SIGNED (but not delivered until the date    )
hereof) as a DEED by the said               )
COLIN NUNN...............................   )     /s/ Colin Nunn................
in the presence of:-                        )     ------------------------------


WITNESS:

Name:     /s/ illegible............
          -------------------------

Address: London WC1X...............

        ...........................

Occupation Trainee Solicitor.......


SIGNED (but not delivered until the date    )
hereof) as a DEED by the said               )
TOBY GAWIN................................  )      /s/ Toby Gawin...............
in the presence of:-                        )     ------------------------------



WITNESS:

Name:     /s/ illegible..............
          ---------------------------
Address: London WC1X.................

         ............................

Occupation:  Solicitor...............



                                       50



EXECUTED (but not delivered until the )
date hereof) as a DEED by             )
MACROVISION CORPORATION               )
acting by                             )
                                      

                           Authorised Signatory:   /s/ Victor Viegas............
                                                   -----------------------------