PRESS RELEASE

July 1st, 2005

UK Production Environment Leads to Closure of London Division of Jim Henson’s Creature Shop

Company to Continue to Provide Worldwide Visual Effects Services

Hollywood, CA (July 1st, 2005) – The Jim Henson Company will no longer have a full time staff at its London location of Jim Henson ‘ s Creature Shop, the company ‘ s visual effects and animatronics division. Citing the dollar ‘ s unfavorable exchange rate and the absence of concrete tax incentives in the UK production market, Peter Schube, President & Chief Operating Officer made the announcement today from the corporate headquarters in Hollywood, CA. The company’s own television and film projects are not affected and the Creature Shop will continue to service third party clients out of its Los Angeles and New York locations, as well as hiring freelance crews in London on a project-by-project basis.

Peter Schube said, “Jim Henson’s Creature Shop in London was founded on the highest standards of innovation and creativity, launching our worldwide facilities with those principles in mind. We are grateful to the UK film industry for its important place in our company’s history and we are confident that it will remain a significant production center for us.”

About Jim Henson’s Creature Shop

Jim Henson ‘ s Creature Shop is one of the pre-eminent character-building and visual effects facilities serving the international film, television and advertising industries. Most recently, the Creature Shop provided characters and visual effects for Are We There Yet?, Five Children and It and the critically acclaimed television miniseries Farscape: The Peacekeeper Wars . Previous projects include Around the World in 80 Days , The Brotherhood of the Wolf (Le Pact des Loups) , The English Patient , Lost in Space, 101 Dalmatians , Cats and Dogs and Babe. Previously, The Creature Shop received a Scientific and Engineering Academy Award Ò for the Henson Performance Control System, a powerful custom-based interface for puppeteers, and won a second Academy Award for its visual effects work on the film Babe. Jim Henson’s Creature Shop has been recognized by the prestigious Computerworld Honors 21 st Century Achievement Award , which recognizes innovative applications of technology that benefit society and the Computer Graphics World Innovation Award. Both awards were given to The Shop for its work in developing the Henson Digital Performance System (HDPS), a patented control system technology that enables puppeteers to physically perform a computer generated character in real time and recently featured in the production of Frances , a preschool project in partnership with HIT Entertainment. Jim Henson’s Creature Shop can be visited online at www.creatureshop.com