Exhibit 10.3

 

Guaranty Commitment

 

This Guaranty Commitment dated as of September 2, 2008 is by and between
Hallmark Cards, Incorporated (“Hallmark”) and Crown Media United States, LLC
(“CMUS”).

 

WHEREAS, CMUS desires to enter into that certain Lease Agreement dated as of
September 8, 2008 by and between Paramount Group, Inc. as agent for 1325 Avenue
of Americas, L.P. (“Landlord”) and CMUS for the office space at 1325 Avenue of
the Americas, New York, New York 10019 (the “Lease Agreement”); and

 

WHEREAS, as a condition of executing the Lease Agreement, the Landlord has
required that CMUS provide a guaranty of the Lease Agreement by Hallmark; and

 

WHEREAS, Hallmark has agreed to provide such a guaranty upon the terms and
conditions set forth herein (the “Guaranty”);

 

NOW, THEREFORE, the parties agree hereto as follows:

 

1.             Guaranty. Hallmark agrees to provide the Guaranty which shall
contain terms and conditions agreeable to Landlord and Hallmark.

 

2.             Guaranty Fee. As an inducement for Hallmark to provide this
Guaranty, CMUS shall pay to Hallmark a fee in the amount of      % per annum of
the outstanding Lease Obligation (the “Guaranty Fee”). The Guaranty Fee shall be
paid first upon the commencement of the Lease Agreement and then calculated for
a 6-month period and paid in advance thereafter. The initial Lease Obligation
amount shall be                     . For purposes of calculating the Guaranty
Fee, the first Guaranty Fee shall be based on the initial Lease Obligation
amount and then on a Lease Obligation amount reduced by                        
at the conclusion of each 6-month period.

 

3.             Payment Terms. In the event that Hallmark is required to pay any
amounts pursuant to the Guaranty, CMUS shall be obligated to reimburse Hallmark
immediately for (i) any amount paid by Hallmark; (ii) any fees and charges in
connection with such payment; (iii) interest on such amount for each day from
and including the date of payment at a rate per annum equal to the lesser of
(A) Libor + 5% and (B) the highest rate permitted by applicable law; and
(iv) Hallmark’s costs and expenses in connection with the protection or
enforcement of its rights under this Agreement.

 

4.             Obligations Absolute. CMUS’ payment obligations under this
Agreement are absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances including, without limitation: (i) any lack of validity,
enforceability or legal effect of the Lease Agreement or this Agreement or any
term or provision therein or herein; (ii) any claim that any claim for payment
or payment made pursuant to the Guaranty was inappropriate or inaccurate in any
respect; (iii) the existence of any claim, set-off, defense or other right that
CMUS may have against Landlord or Hallmark; and (iv) any event, circumstance, or
conduct whatsoever that might constitute a legal or equitable defense to CMUS’
obligations hereunder.

 

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5.             Security. Any obligations arising hereunder shall be included on
Schedule A to that certain Security and Pledge Agreement dated as of July 27,
2007, by and among Crown Media Holdings, Inc. and its subsidiaries and Hallmark
and various of its subsidiaries (“Security Agreement”) and consequently such
obligations shall be secured by the Collateral (as defined in the Security
Agreement).

 

6.             Indemnification. CMUS shall indemnify and hold harmless Hallmark,
its subsidiaries and each of their respective directors, officers, employees and
agents (each, including Hallmark, an “Indemnified Person”) from and against any
and all claims, suits, judgments, costs, losses, fines, penalties, liabilities,
and expenses, and legal fees, charges and disbursements of any counsel for any
Indemnified Person, arising out of, in connection with, or as a result of:
(i) any payment or claim for payment pursuant to this Agreement; (ii) any action
or proceeding arising out of or in connection with any payment or claim for
payment pursuant to this Agreement; (iii) any third party seeking to enforce the
rights of Landlord or any other beneficiary; (iv) the fraud, forgery or illegal
action of parties other than the Indemnified Person; (v) the enforcement of this
Agreement or any of Hallmark’s rights or remedies under or in connection with
this Agreement.

 

7.             Representation and Warranties. CMUS hereby represents and
warrants as of the date of this Agreement that: (a) it has all necessary power
and authority to enter into and perform this Agreement; (b) it has obtained all
authorizations, consents and approvals required for it to enter into and perform
this Agreement in accordance with its terms; (c) this Agreement constitutes the
legal, valid and binding obligation of CMUS enforceable against it in accordance
with its terms; (d) the execution, delivery and performance of this Agreement by
CMUS does not and will not contravene (i) its charter, by-laws or other
organizational documents, (ii) any order or writ binding on or affecting CMUS or
its properties, or (iii) any agreement or arrangement to which CMUS is a party
or by which it or its properties may otherwise be bound, the Contravention of
which agreement or arrangement would have a material adverse effect on CMUS.

 

8.             Lease Amendment. CMUS shall not make any amendments to or modify
or waive any terms of the Lease Agreement without the prior written consent of
Hallmark. Further, CMUS shall not be permitted to make modifications to the
lease space in excess of $400,000 in the aggregate for all improvements during
the term of the Lease Agreement without the prior written consent of-Hallmark.

 

9.             Amendment; Waiver. Hallmark shall not be deemed to have amended
or modified any term hereof, or waived any of its rights unless Hallmark
consents in writing to such amendment, modification or waiver. No such waiver,
unless expressly stated therein, shall be effective as to any transaction which
occurs subsequent to such waiver, nor as to any continuance of a breach after
such waiver. Hallmark’s consent to any amendment, waiver, or modification does
not mean that Hallmark shall consent or has consented to any amendment,
modification, or waiver of a term of the Lease Agreement unless explicitly
stated therein.

 

10.           Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Missouri, without regard to
principles of conflict of laws.

 

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11.         No Third Party Beneficiary. This Agreement shall be binding upon and
inure to the benefit of Hallmark and CMUS and their respective successors and
permitted assigns. This Agreement shall not confer any right or benefit upon any
person or entity (including the Landlord) other than the parties to this
Agreement, the Indemnified Persons and their respective successors and permitted
assigns.

 

12.           No Assignment. CMUS may not assign or transfer this Agreement or
the benefit of the Guaranty without the prior written consent of Hallmark. A
change in control or a sale of substantially all of the assets of CMUS shall be
considered an assignment. Any attempted assignment or transfer without the prior
written consent of Hallmark shall be void.

 

IN WITNESS WHEREOF, this Guaranty Commitment is executed by the parties hereto
as of the date first written above.

 

 

CROWN MEDIA UNITED STATES, LLC

 

 

 

By:

C. Stanford

 

 

 

 

Title:

Vice President

 

 

 

 

 

 

HALLMARK CARDS, INCORPORATED

 

 

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

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GUARANTY

 

Hallmark Cards, Incorporated, a Missouri corporation (hereinafter called
“Guarantor”), having an office at 2501 McGee, MD 339, Kansas City, MO 64108, has
requested Paramount Group, Inc., as agent for 1325 Avenue of the Americas, L.P.
(hereinafter called “Landlord”), having an office c/o Paramount Group, Inc.,
1633 Broadway, Suite 1801, New York, NY 10019, to accept this Guaranty for that
certain lease between Landlord and Crown Media United States, LLC, as Tenant (as
the same may hereafter be amended, the “Lease”), covering certain premises
(Premises) as more particularly described in the Lease in the building
(Building) known as 1325 Avenue of the Americas, New York, New York. In order to
induce Landlord to enter into the Lease and in consideration of Landlord’s
entering into the Lease and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
guarantees, unconditionally and absolutely, to Landlord, its successors and
assigns (without requiring any notice of nonpayment, nonkeeping, nonperformance
or nonobservance or proof of notice or demand whereby to charge Guarantor, all
of which Guarantor hereby expressly waives), the full and faithful keeping,
performance and observance of all of the covenants, agreements, terms,
provisions and conditions of the Lease provided to be kept, performed and
observed by Tenant (expressly including, without being limited to, the payment
as and when due of fixed rent, additional rent, charges, interest and damages
payable by Tenant under the Lease) and the payment of any and all other damages
for which Tenant shall be liable by reason of any act or omission contrary to
any of said covenants, agreements, terms, provisions or conditions.

 

Guarantor acknowledges that additional consideration for Guarantor giving this
Guaranty to Landlord is the fact that Guarantor indirectly owns a majority of
Tenant and that Guarantor is issuing this Guaranty to induce Landlord to enter
into the Lease with Tenant. As a further inducement to Landlord to enter into
the Lease and in consideration thereof, Guarantor represents and warrants that
this Guaranty has been duly authorized by all necessary corporate action on
Guarantor’s part, has been duly executed and delivered by a duly authorized
officer, and constitutes Guarantor’s valid and legally binding agreement in
accordance with its terms.

 

As a further inducement to Landlord to enter into the Lease and in consideration
thereof, Guarantor hereby expressly covenants and acknowledges as follows:

 

1.                                       The obligations hereunder of Guarantor
shall not be terminated or affected in any way or manner whatsoever by reason of
Landlord’s resort, or Landlord’s omission to resort, to any summary or other
proceedings, actions or remedies for the

 

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enforcement of any of Landlord’s rights under the Lease or with respect to the
Premises thereby demised or by reason of any extensions of time or indulgences
granted by Landlord, or by reason of the assignment or surrender of all or any
part of the Lease or the term and estate thereby granted or all or any part of
the Premises demised thereby except to the extent that Tenant is released in
writing by Landlord from any obligation in connection with any such assignment
or surrender. The liability of Guarantor is coextensive with that of Tenant and
also joint and several, and action or suit may be brought against Guarantor and
carried to final judgment and/or completion and recovery had, either with or
without making Tenant a party thereto. Insofar as the payment by Tenant of any
sums of money to Landlord is involved, this Guaranty is a guaranty of payment
and not of collection and shall remain in full force and effect until payment in
full to Landlord of all sums payable under this Lease. Guarantor waives any
right to require that any action be brought against Tenant or to require that
resort be had to any security or to any other credit in favor of Tenant.
Landlord shall not be required to apply any security deposit held by it to the
reduction of any of Guarantor’s obligations hereunder and the amount of any such
security deposit as may be applied by Landlord shall not be credited to the
benefit of Guarantor.

 

2.                                       Guarantor acknowledges and agrees that
this Guaranty and Guarantor’s obligations under this Guaranty are and shall at
all times continue to be absolute, present, primary and unconditional in all
respects, and shall at all times be valid and enforceable irrespective of any
other agreements or circumstances of any nature whatsoever which might otherwise
constitute a defense to this Guaranty and the obligations of Guarantor under
this Guaranty or the obligations of any other person or party (including,
without limitation, Tenant) relating to this Guaranty or the obligations of
Guarantor hereunder or otherwise with respect to the Lease. The Guaranty sets
forth the entire agreement and understanding of Landlord and Guarantor, and
Guarantor absolutely, unconditionally and irrevocably waives any and all right
to assert any defense, set-off, counterclaim or cross-claim of any nature
whatsoever with respect to this Guaranty or the obligations of Guarantor under
this Guaranty or the obligations of any other person or party (including,
without limitation, Tenant) relating to this Guaranty or the obligations of
Guarantor under the Guaranty or otherwise with respect to the Lease in any
action or proceeding brought by Landlord with respect to the Lease or the
obligations of Guarantor under this Guaranty. Guarantor acknowledges that no
oral or other agreements, understandings, representations or warranties exist
with respect to this Guaranty or with respect to the obligations of Guarantor
under this Guaranty except as specifically set forth in this Guaranty.

 

3.                                       If the Lease shall be renewed, or its
term extended or

 

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held over by Tenant for any period beyond the date specified in the Lease for
the expiration of said term, of if additional space shall be included in, or
substituted for all or any part of, the Premises demised by the Lease, or if the
Lease be modified by agreement between Landlord and Tenant in any other similar
or dissimilar respect, the obligations hereunder of Guarantor shall extend and
apply with respect to the full and faithful keeping, performance and observance
of all of the covenants, agreements, terms, provisions and conditions which
under such renewal of the Lease or extension of its term and/or with respect to
any such additional space, or which under any supplemental indenture or new
lease or modifications agreement, entered into for the purpose of expressing or
confirming any such renewal, extension, inclusion, substitution or modification,
are to be kept, performed and observed by Tenant (expressly including, without
being limited to, the payment as and when due of Fixed Rent, additional rent,
charges and damages provided for thereunder) and the payment of any and all
other damages for which Tenant shall be liable by reason of any act or omission
contrary to any of said covenants, agreements, terms, provisions or conditions.
Notwithstanding the foregoing, in the event Landlord and Tenant enter into an
agreement whereby Tenant leases additional space in the Building or the term of
the Lease is renewed or extended or the Fixed Rent is increased (such lease of
additional space, renewal or extension not pursuant to the terms of any options
or rights contained in the Lease), Guarantor’s obligations hereunder shall
extend and apply to such lease of additional space, renewal or extension or
increase in Fixed Rent only if Guarantor has consented to such lease of
additional space, renewal or extension or increase in Fixed Rent (provided
Guarantor’s obligations hereunder shall remain unimpaired with respect to the
Lease without regard to the lease of additional space, renewal or extension or
increase in Fixed Rent).

 

4.                             Neither the giving nor the withholding by
Landlord of any consent or approval provided for in the Lease shall affect in
any way the obligations hereunder of Guarantor.

 

5.                             The undersigned waives and releases any claim
(within the meaning of 11 U.S.C. § 101) which it may have against Tenant arising
from a payment made by the undersigned under this Guaranty and agrees not to
assert or take advantage of any subrogation rights to proceed against Tenant for
reimbursement. It is expressly understood that the waivers and agreements of the
undersigned set forth above constitute additional and cumulative benefits given
to Landlord for its security and as an inducement for its entering into the
Lease with Tenant. Neither Guarantor’s obligation to make payment in accordance
with the terms of this Guaranty nor any remedy for the enforcement thereof shall
be impaired, modified, changed, stayed, released or limited in any

 

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manner whatsoever by any impairment, modification, change, release, limitation
or stay of the liability of Tenant or its estate in bankruptcy or any remedy for
the enforcement thereof, resulting from the operation of any present or future
provision of the Bankruptcy Code of the United States or other statute or from
the decision of any court interpreting any of the same, and Guarantor shall be
obligated under this Guaranty as if no such impairment, stay, modification,
change, release or limitation had occurred. This Guaranty shall continue to be
effective or shall be reinstated (as the case may be) if at any time payment of
all or any part of any sum payable pursuant to the Lease is rescinded or
otherwise required to be returned by Landlord upon the insolvency, bankruptcy,
or reorganization of Tenant, all as though such payment to Landlord had not been
made, regardless of whether Landlord contested the order requiring the return of
such payment.

 

6.                                       Until all the covenants and conditions
in the Lease on the Tenant’s part to be performed and observed are fully
performed and observed, the Guarantor: (a) shall have no right of subrogation
against the Tenant by reason of any payments or acts of performance by the
Guarantor, in compliance with the obligations of the Guarantor hereunder;
(b) waives any right to enforce any remedy which the Guarantor now or hereafter
shall have against the Tenant by reason of any one or more payment or acts of
performance in compliance with the obligations of the Guarantor hereunder; and
(c) subordinates any liability or indebtedness of the Tenant now or hereafter
held by the Guarantor to the obligations of the Tenant to the Landlord under the
Lease. Nothing contained in this Guaranty shall prevent Tenant from making
payments to Guarantor in the ordinary course of business so long as Tenant is
not in default under any of its obligations under this Lease.

 

7.                                       This Guaranty, and all of the terms
hereof, shall be binding on Guarantor and the successors, assigns, and legal
representatives of Guarantor.

 

8.                                       Guarantor hereby waives the right to
trial by jury in any action or proceeding that may hereafter be instituted by
Landlord against Guarantor in respect of this Guaranty.

 

9.                                       All of Landlord’s rights and remedies
under the Lease or under this Guaranty are intended to be distinct, separate and
cumulative, and no such right or remedy therein or herein mentioned is intended
to be in exclusion of or a waiver of any of the others.

 

10.                                 This Guaranty shall be deemed to have been
made in the State of New York, Guarantor consents to the jurisdiction of the
courts of the State of New York, and the rights and liabilities of Landlord and
Guarantor shall be determined in accordance with

 

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the laws of the State of New York. Guarantor agrees that it will be conclusively
bound by the judgment in any action by Landlord against Tenant (wherever
brought) as if Guarantor were a party to such action, even though Guarantor is
not joined as a party in such action. In addition, if Guarantor cannot be
effectively served with process pursuant to the laws of the State of New York
because Guarantor does not have sufficient contacts with New York or for any
other reason, then Guarantor agrees that effective service of process upon
Tenant shall constitute effective service of process upon Guarantor as well.

 

11.                                 Guarantor will pay to Landlord all
Landlord’s expenses, including, but not limited to, reasonable attorneys’ fees
and expenses, in enforcing this Guaranty.

 

12.                                 This Guaranty shall survive the termination
of the Lease.

 

Date:                    September 8, 2008

 

 

 

HALLMARK CARDS, INCORPORATED

 

 

 

 

 

 

 

By:

/s/ Brian E. Gardner

 

 

Name:  Brian E. Gardner

 

 

Title:   Executive Vice President

 

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State of Missouri

)

 

 

)

ss.:

County of Jackson

)

 

 

On the 8th day of September in the year 2008 before me, the undersigned, Notary
Public in and for said State, personally appeared Brian E. Gardner personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

 

 

 

/s/ Becky J. Long

 

Notary public

 

 

SEAL

Becky J. Long - Notary Public

 

Notary Seal, State of

 

Missouri - Bates County

 

Commission #05694823

 

My Commission Expires 4/12/2009

 

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