Exhibit 10.97

 

PROMISSORY NOTE

 

Principal Amount: $132,785,424

Date:       As of October 1, 2005
Wilmington, Delaware

 

§1.                Promise to Pay.

 

For value received, the Company hereby promises to pay to the order of Hallmark
Entertainment Distribution, LLC or its assigns, (“Distribution”) at such place
as Distribution may, from time to time specify in writing, the above principal
amount outstanding under this Note together with all fees and accrued interest
no later than the Maturity Date and in accordance with Section 2 hereof.

 

§2.                Interest.

 

§2.1           Loans provided hereunder shall bear interest at the rate of LIBOR
plus 300 basis points per annum from the effective date of October 1, 2005 and
shall be payable in full on August 31, 2006 (“Maturity Date”).

 

§2.2           All calculations of interest and fees shall be made on the basis
of actual number of days elapsed in a 360-day year.

 

§2.3           “LIBOR” shall mean the three month rate for London Inter-Bank
Offering Rate published for the first day of each quarter in the Wall Street
Journal.

 

§3.                Repayment and Optional Prepayment.

 

§3.1           The Company shall pay to Distribution a single principal payment
together with all accrued and unpaid interest on the Maturity Date.

 

§3.2           The Company shall have the privilege at any time and from time to
time, to prepay this Note in whole or in part without premium or penalty to the
extent permitted by that certain Credit and Security Agreement dated as of
August 31, 2001 with JPMorgan Chase as agent (“Credit Agreement”).

 

§4.                Events of Default.

 

Each of the following shall constitute an event of default hereunder (an “Event
of Default”):

 

(i)                        The failure of the Company to make any payment of
principal or interest hereunder when the same is due and payable, and such
failure to pay continues for a period of five (5) days or more after written
notice thereof from Distribution;

 

(ii)                     The Company shall be in default with respect to the
Credit Agreement or with respect to that certain Note Purchase Agreement dated
as of August 1, 2003 by and between Crown Media Holdings, Inc. and HC Crown Corp
and such default under either facility could accelerate the maturity of the
indebtedness thereunder and such default is not cured or waived within the grace
period provided therein.

 

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5.                         Remedies.

 

Upon the occurrence of an Event of Default and at any time thereafter during the
continuance of such Event of Default hereunder, Distribution shall have the
right to declare the entire unpaid amount of principal and interest hereunder
immediately due and payable in full without presentation, demand or protest,
each of which is hereby waived by the Company.

 

§6                     Waivers.

 

§6.1           The failure by Distribution to exercise any right or remedy
available hereunder in the Event of Default shall in no event be construed as a
waiver or release of the same. Likewise, Distribution shall not, by any act or
omission or commission, be deemed to waive any right hereunder unless such
waiver is evidenced in writing and signed by Distribution, and then only to the
extent specifically set forth in such writing. Moreover, a waiver with respect
to any one event shall not be construed as continuing or as a bar to or waiver
of Distribution’s rights or remedies with respect to any subsequent event.

 

§6.2           The Company expressly waives presentment for payment, notice of
dishonor, protest, notice of protest, diligence of collection, and each other
notice of any kind, and hereby consent to any number of renewals or extensions
of time for payment hereof, which renewals and extensions shall not affect the
liability of the Company.

 

§6.3           The Company hereby waives and releases all errors, defects and
imperfections in any proceeding instituted by Distribution under the terms
hereof as well as all benefits that might accrue to the Company by virtue of any
present or future laws exempting any property, real, personal or mixed, or any
part of the proceeds arising from any sale of such property, from attachment,
levy or sale under execution, or providing for any stay of execution, exemption
from civil process, or extension of time for payment; and the Company agrees
that any real estate that may be levied upon pursuant to a judgment obtained by
virtue hereof, or any writ of execution issued thereon, may be sold upon any
such writ in whole or in part or in any other manner desired by Distribution.

 

§7.                  Notices.

 

Each notice required to be given to any party hereunder shall be in writing and
shall be deemed to have been sufficiently given for all purposes when sent by
certified or registered mail, return receipt requested, to the party at its
respective address as follows or to such other address as indicated by such
party in writing:

 

 

Company:

Crown Media United States, LLC
12700 Ventura Blvd, Suite 200
Studio City, CA 91604
Phone: 818-755-2400
ATTN: William J. Aliber

 

 

 

 

Distribution:

Hallmark Entertainment Distribution, LLC
1 1325 Ave. of the Americas
New York, NY 10019
Phone: 212-977-9001
ATTN: Robert Halmi, Jr.

 

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With a copy to:

Hallmark Cards, Incorporated
P.O. Box 419126
Kansas City, MO 64141
ATTN: General Counsel

 

§8.                  Assignability.

 

This Agreement shall be binding upon and inure to the benefit of the Company and
Distribution and their respective successors and assigns; provided, however,
that this Note, or any portion thereof, may not be assigned by the Company
without the written consent of Distribution.

 

§9.                  Modifications.

 

This Note may be modified only in a writing signed by the Company and
Distribution. Any amendment, extension of time or any other modification shall
not affect Company’s obligations hereunder.

 

§10.           Governing Law.

 

This Note shall be governed by and construed according to the laws of the State
of Delaware without regard to the conflict of laws provision thereof.

 

§11.           Headings.

 

The heading preceding the text of each Section hereof is inserted solely for
convenience of reference and shall not constitute a part of this Note, nor shall
the same affect the meaning, construction of effect hereof.

 

§12.           Severability.

 

If any provision of this Note or the application thereof is declared by a court
of competent jurisdiction to be invalid or unenforceable, the remaining
provisions hereof shall be unaffected and remain valid and enforceable to the
fullest extent permitted by law.

 

IN WITNESS WHEREOF, the undersigned officers have executed this Note as of the
day and year first above written thereby legally binding such party to the terms
hereof.

 

 

 

 

 

CROWN MEDIA UNITED STATES, LLC

 

 

 

 

 

 

 

 

By 

/s/ William J. Aliber

 

 

 

 

 

 

 

 

 

 

 

 

Name:

William J. Aliber

 

 

 

 

 

 

 

 

 

 

 

 

Title:

EVP / CFO

 

 

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