**Exhibit 10.5**

 

AMENDMENT NO. 10 dated as of April 28, 2006 to the Credit,Security, Guaranty and Pledge Agreement dated as of August 31, 2001 as amendedby Amendment 1 through 9 thereto, dated as of December 14, 2001, December 31,2001, March 29, 2002, May 14, 2002, February 5, 2003, August 4,2003, October 28, 2004, March 1, 2005 and March 21, 2006, amongCrown Media Holdings, Inc. (the “Borrower”), the Guarantors named therein,the Lenders referred to therein and JPMorgan Chase Bank, N.A. (formerly known asJPMorgan Chase Bank), as Administrative Agent and as Issuing Bank for theLenders (the “Agent”) (as the same may be further amended, supplemented orotherwise modified, the “Credit Agreement”).

 

INTRODUCTORYSTATEMENT

 

WHEREAS, the Lenders have made available to theBorrower a credit facility pursuant to the terms of the Credit Agreement;

 

WHEREAS, the Borrower has requested that the TotalCommitment be increased from $220,000,000 to $240,000,000 and that each of theLenders increase its existing Commitment by its Pro Rata Share of the $20,000,000increase in the Total Commitment;

 

WHEREAS, the Borrower has requested (i) decreasesin the interest rates applicable to the Loans and in the rate of the CommitmentFees, (ii) an extension of the Maturity Date from May 31, 2006 to May 31,2007, and (iii) the deletion of certain covenants.

 

WHEREAS, the Borrower has agreed to pay a fee to theLenders for executing the Amendment No. 10.

 

NOWTHEREFORE, the parties hereto hereby agree as follows:

 

Section 1.                                            DefinedTerms. Capitalized terms used herein and not otherwise defined herein shallhave the meaning given them in the Credit Agreement.

 

Section 2.                                            Amendmentsto the Credit Agreement. Subject to the satisfaction of the conditionsprecedent set forth in Section 3 hereof, the Credit Agreement is herebyamended as of the Effective Date (as hereinafter defined) as follows:

 

(A)                              Thedefinitions “Applicable Margin” and “Maturity Date” in Article 1 arehereby amended in their entirety to read as follows:

 

“‘Applicable Margin’shall mean (i) in the case of Alternative Base Rate Loans 0% per annum and(ii) in the case of Eurodollar Loans 0.75% per annum.

 

‘Maturity Date’shall mean May 31, 2007.”

 

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(B)                                Section 2.7of the Credit Agreement is hereby amended by decreasing the rate at which theCommitment Fees provided therein are to be computed from 0.20% per annum to0.15% per annum.

 

(C)                                TheTerm Loan Commitment of each of the Lenders having been previously terminated,the Revolving Credit Commitment of each of the Lenders is hereby increased tothe amount set forth in Schedule 1 hereto which amends and restates in itsentirety Schedule 1 to the Credit Agreement and as a result thereof, theRevolving Credit Commitment of each of the Lenders is increased by its Pro RataShare of the $20,000,000 increase and the Total Commitment is increased from $220,000,000to $240,000,000.

 

(D)                               Article 5of the Credit Agreement is hereby amended by deleting in its entirety Section 5.1(d).

 

(E)                                 Article 6of the Credit Agreement is hereby amended as follows:

 

(i)                                     Section 6.1(vi) ishereby amended in its entirety to read as follows:

 

“(vi) Indebtednessto HCC or an Affiliate of HCC which the obligee of such indebtednessacknowledges to be subject to the subordination provisions of the Hallmark CardsSubordination and Support Agreement”.

 

(ii)                                  Section 6.5is amended by deleting the word “and” at the end of clause (v) and theperiod at the end of clause (vi) and by adding the following:

 

“; and(vii) issuance of common stock or payment of amounts pursuant toRestricted Stock Unit Agreements of the Borrower in settlement of awards madeto employees pursuant to the terms of those Agreements.”

 

(iii)                               Section 6.15is hereby amended in its entirety to read as follows:

 

“SECTION 6.15.Production. Engage in production of Items of Product in any fiscal yearhaving an aggregate budgeted negative cost in excess of $5 million”.

 

(iv)                              Thefollowing sections are deleted in their entirety: 6.9, 6.10, 6.21, 6.22, 6.23and 6.24.

 

(F)                                 Article 7of the Credit Agreement is hereby amended by deleting the following paragraphs:(j), (o), (q), (r), (s) and (t).

 

(G)                                Section 13.3(l)of the Credit Agreement as amended by adding the following at the end thereof:

 

“Notwithstanding any of the preceding provisions of this Section 13.3(l),at any time prior to the payment of the Purchase Price, the Agent may makea drawing under the Hallmark L/C in accordance with the terms thereof.”

 

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Section 3.                                            Conditionsto Effectiveness. The effectiveness of this Amendment is subject to thesatisfaction in full of each of the conditions precedent set forth in this Section 3(the date on which all such conditions have been satisfied being herein calledthe “Effective Date”):

 

(A)                              theAgent shall have received counterparts of this Amendment which, when takentogether, bear the signatures of the Borrower, each Guarantor, the Agent andeach Lender;

 

(B)                                therepresentations and warranties in Section 4 hereof shall be true on theEffective Date;

 

(C)                                theAgent shall have received from the Borrower a fee of $120,000, i.e., 0.05%of the Total Commitment after giving effect to the increase thereincontemplated by this Amendment No. 10, for payment to each of the Lenderson a pro rata basis;

 

(D)                               theAgent shall have received documentation satisfactory to it evidencing anamendment to the Hallmark L/C (i) extending the expiration date thereof toa date no earlier than June 10, 2007 and (ii) increasing the amountthereof from $220,000,000 to $240,000,000; and

 

(E)                                 alllegal matters incident to this Amendment shall be satisfactory to Morgan, Lewis &Bockius, counsel for the Agent.

 

Section 4.                                            Representationsand Warranties of the Credit Parties. Each Credit Party represents andwarrants that:

 

(A)                              aftergiving effect to this Amendment, the representations and warranties containedin the Credit Agreement are true and correct in all material respects on and asof the date hereof as if such representations and warranties had been made onand as of the date hereof (except to the extent that any such representationsand warranties specifically relate to an earlier date); and

 

(B)                                aftergiving effect to this Amendment, no Event of Default or Default will haveoccurred and be continuing on and as of the date hereof.

 

Section 5.                                            FurtherAssurances. At any time and from time to time, upon the Agent’s request andat the sole expense of the Credit Parties, each Credit Party will promptly andduly execute and deliver any and all further instruments and documents and takesuch further action as the Agent reasonably deems necessary to effect thepurposes of this Amendment. In furtherance of the foregoing, each of theLenders agree within a reasonable period of time to surrender its existingRevolving Credit Note to the Agent in exchange for a new note evidencing itsshare of the increased Total Commitment and the Borrower agrees to provide theAgent with executed copies of such replacement notes as soon as practicable.

 

Section 6.                                            FundamentalDocuments. This Amendment is designated a Fundamental Document by theAgent.

 

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Section 7.                                            FullForce and Effect. Except as expressly amended hereby, the Credit Agreementand the other Fundamental Documents shall continue in full force and effect inaccordance with the provisions thereof on the date hereof. As used in theCredit Agreement, the terms “Agreement”, “this Agreement”, “herein”,  “hereafter”, “hereto”, “hereof”, and words ofsimilar import, shall, unless the context otherwise requires, mean the CreditAgreement as amended by this Amendment.

 

Section 8.                                            APPLICABLELAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITHTHE LAWS OF THE STATE OF NEW YORK.

 

Section 9.                                            Counterparts.This Amendment may be executed in two or more counterparts, each of whichshall constitute an original, but all of which when taken together shallconstitute but one instrument.

 

Section 10.                                      Expenses.The Borrower agrees to pay all out-of-pocket expenses incurred by the Agent inconnection with the preparation, execution and delivery of this Amendment,including, but not limited to, the reasonable fees and disbursements of counselfor the Agent.

 

Section 11.                                      Headings.The headings of this Amendment are for the purposes of reference only and shallnot affect the construction of or be taken into consideration in interpretingthis Amendment.

 

IN WITNESSWHEREOF, the parties hereby have caused this Amendment to be duly executed asof the date first written above.

 
|   | **BORROWER**:                    |
|--------|----------------------------------|
|   |                             |   |
|   | CROWN MEDIA  HOLDINGS, INC. |
|   |                             |   |
|   |                             |   |
|   | By                               | /s/ William J. Aliber |   |
|   |                             | Name: | William J. Aliber |
|   |                             | Title: | EVP/CFO |
|        |                                  |  |  |  |

 

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|   | **GUARANTORS:**                   |
|--------|-----------------------------------|
|   | ** **                        |
|   | CM INTERMEDIARY,  LLC             |
|   | CROWN MEDIA  DISTRIBUTION, LLC    |
|   | CROWN MEDIA  UNITED STATES, LLC   |
|   | CITI TEEVEE, LLC                  |
|   | DOONE CITY  PICTURES, LLC         |
|   | WAYZGOOSE  CONCERT SERVICES, B.V. |
|   |                              |
|   |                              |
|   | By                                | /s/ William J. Aliber |   |
|   |                              | Name: | William J. Aliber |
|   |                              | Title: | EVP/CFO |
|        |                                   |  |  |  |

 

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|   | **LENDERS**:                                                                                                                                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                       |   |
|   | JPMORGAN CHASE BANK, N.A. (f/k/a   JPMorgan Chase Bank and as successor by merger   to Bank One, N.A. (Main Office Chicago)),   individually and as Agent and Issuing Bank |
|   |                                                                                                                                                                       |
|   |                                                                                                                                                                       |   |
|   | By                                                                                                                                                                         | /s/ Christa L. Thomas |
|   |                                                                                                                                                                       | Name: Christa L. Thomas |
|   |                                                                                                                                                                       | Title: Senior Vice President |
|   |                                                                                                                                                                       |   |
|   |                                                                                                                                                                       |   |
|   | BANK OF AMERICA, N. A.                                                                                                                                                     |
|   |                                                                                                                                                                       |
|   |                                                                                                                                                                       |   |
|   | By                                                                                                                                                                         | /s/ Thomas R. Durham |
|   |                                                                                                                                                                       | Name: Thomas R. Durham |
|   |                                                                                                                                                                       | Title: Senior Vice President |
|   |                                                                                                                                                                       |   |
|   |                                                                                                                                                                       |   |
|   | CREDIT SUISSE FIRST BOSTON                                                                                                                                                 |
|   |                                                                                                                                                                       |
|   |                                                                                                                                                                       |   |
|   | By                                                                                                                                                                         | /s/ Doreen Barr |
|   |                                                                                                                                                                       | Name: Doreen Barr |
|   |                                                                                                                                                                       | Title: Vice President |
|   |                                                                                                                                                                       |   |
|   |                                                                                                                                                                       |   |
|   | By                                                                                                                                                                         | /s/ Denise L. Alvarez |
|   |                                                                                                                                                                       | Name: Denise L. Alvarez |
|   |                                                                                                                                                                       | Title: Associate |
|   |                                                                                                                                                                       |   |
|   |                                                                                                                                                                       |   |
|   | CITICORP USA, INC.                                                                                                                                                    |
|   |                                                                                                                                                                       |
|   |                                                                                                                                                                       |   |
|   | By                                                                                                                                                                         | /s/ Robert Parr |
|   |                                                                                                                                                                       | Name: Robert Parr |
|   |                                                                                                                                                                       | Title: Managing Director |

 

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|   | DEUTSCHE BANK AG NEW YORK BRANCH                                          |
|--------|---------------------------------------------------------------------------|
|   |                                                                      |
|   |                                                                      |   |
|   | By                                                                        | /s/ Frederick W. Laird |
|   |                                                                      | Name: Frederick W. Laird |
|   |                                                                      | Title: Managing Director |
|   |                                                                      |   |
|   |                                                                      |   |
|   | By                                                                        | /s/ Ming K. Chu |
|   |                                                                      | Name: Ming K. Chu |
|   |                                                                      | Title: Vice President |
|   |                                                                      |   |
|   |                                                                      |   |
|   | ROYAL BANK OF CANADA                                                      |
|   |                                                                      |
|   |                                                                      |   |
|   | By                                                                        | /s/ Mark Narbey |
|   |                                                                      | Name: Mark Narbey |
|   |                                                                      | Title: Authorized Signatory |
|   |                                                                      |   |
|   |                                                                      |   |
|   | ABN AMRO BANK N.V.                                                        |
|   |                                                                      |
|   |                                                                      |   |
|   | By                                                                        | /s/ Pradeep K. Bhatia |
|   |                                                                      | Name: Pradeep K. Bhatia |
|   |                                                                      | Title: Vice President |
|   |                                                                      |   |
|   |                                                                      |   |
|   | By                                                                        | /s/ Michael McIntyre |
|   |                                                                      | Name: Michael McIntyre |
|   |                                                                      | Title: Vice President |
|   |                                                                      |   |
|   |                                                                      |   |
|   | WESTLB AG, NEW YORK BRANCH (f/k/a   Westdeutsche Landesbank Girozentrale) |
|   |                                                                      |
|   |                                                                      |   |
|   | By                                                                        |   |
|   |                                                                      | Name: |
|   |                                                                      | Title: |
|   |                                                                      |   |
|   |                                                                      |   |
|   | By                                                                        |   |
|   |                                                                      | Name: |
|   |                                                                      | Title: |

 

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Accepted and Agreed to bythe undersigned as the Beneficiary of Section 13.3(l) of the CreditAgreement and as the Account Party on whose behalf the Hallmark L/C has beenissued:

HALLMARK CARDS, INCORPORATED

 

 
| By     | /s/ E. Bruce McKinney   |   |   |
|--------|-------------------------|--------|--------|
|   | Name: E. Bruce McKinney |   |
|   | Title: Treasurer        |   |
|   | Date:  May 5, 2006 |   |

 

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SCHEDULE 1

 
| **Lender**                           | ** ** | **Revolving Credit  Commitment** | ** **      | **Total  Commitment** | ** ** | **Percentage**  | ** ** |
|--------------------------------------|------------|---------------------------------------|-----------------|-----------------------|------------|-----------------|------------|
| **JPMorgan Chase Bank**              | ** ** | **41,250,000**                        | ** **      | **41,250,000**        | ** ** | **17.1875**     | **%**      |
| **Bank of America, N.A.**            | ** ** | **30,000,000**                        | ** **      | **30,000,000**        | ** ** | **12.5000**     | **%**      |
| **Credit Suisse First Boston**       | ** ** | **30,000,000**                        | ** **      | **30,000,000**        | ** ** | **12.5000**     | **%**      |
| **Citicorp USA, Inc.**          | ** ** | **30,000,000**                        | ** **      | **30,000,000**        | ** ** | **12.5000**     | **%**      |
| **Deutsche Bank AG New York Branch** | ** ** | **30,000,000**                        | ** **      | **30,000,000**        | ** ** | **12.5000**     | **%**      |
| **Royal Bank of Canada**             | ** ** | **30,000,000**                        | ** **      | **30,000,000**        | ** ** | **12.5000**     | **%**      |
| **WestLB AG, New York Branch**       | ** ** | **26,250,000**                        | ** **      | **26,250,000**        | ** ** | **10.9375**     | **%**      |
| **ABN Amro**                         | ** ** | **22,500,000**                        | ** **      | **22,500,000**        | ** ** | **9.3750**      | **%**      |
| ** **                           | ** ** | ** **                            | ** **      | ** **            | ** ** | ** **      | ** ** |
| **TOTAL**                            | ** ** | **$**                                 | **240,000,000** | ** **            | **$**      | **240,000,000** | ** ** | **100.00** | **%** |
|                                      |            |                                       |                 |                       |            |                 |            |  |  |

 

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