**Exhibit 10.3**

**PROMISSORYNOTE**
| Principal Amount:  **$33,082,019** | Date:  | As of July 27, 2007   |
|-----------------------------------------|--------|-----------------------|
|                                    |   | Wilmington,  Delaware |
|                                         |        |                       |  |

 

**§1.****          Promise to Pay.**

For value received, the Company hereby promises to pay to the order ofHallmark Cards, Incorporated or its assigns, (“Hallmark”) at such place asHallmark may, from time to time specify in writing, the above principal amountoutstanding under this Note (as the same may be adjusted pursuant to § 2.4hereof) together with all fees and accrued interest no later than the MaturityDate and in accordance with Section 2 hereof.

**§2.****          Interest andAdjustments.**

**§2.1**        Loans provided hereunder shall bear interest at therate of LIBOR plus 300 basis points per annum from the effective date indicatedabove and shall be payable in full on the date two (2) years thereafter (“MaturityDate”).

**§2.2**        Allcalculations of interest and fees shall be made on the basis of actual numberof days elapsed in a 360-day year and accrued but unpaid interest shall beadded to the principal amount annually.

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

**§2.4**        Theprincipal amount of this Note reflects repayments due to Hallmark pursuant tothat certain Tax Sharing Agreement dated March 11, 2003 by and between theparties (“Tax Sharing Agreement”) and shall be increased or decreased, asappropriate to reflect interest payable to the Internal Revenue Service inconnection with such repayments.

**§3.****          Repayment andOptional Prepayment.**

**§3.1****       **Hallmarkshall offset any Estimated Crown Tax Benefits (as defined in the Tax SharingAgreement) first against accrued and unpaid interest and then to the unpaidprincipal balance of this Note until the earlier of such time as the balanceequals zero or the Maturity Date.

**§3.2****       **TheCompany shall pay to Hallmark a single principal payment together with allaccrued and unpaid interest on the Maturity Date.

**§3.3****       **TheCompany shall have the privilege at any time and from time to time, to prepaythis Note in whole or in part without premium or penalty to the extentpermitted by that certain Credit and Security Agreement dated as of August 31,2001 with JPMorgan Chase as agent (“Credit Agreement”).

  

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**§4.****          Events of Default.**

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

(i)            The failure of the Company to make anypayment 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 afterwritten notice thereof from Hallmark;

(ii)           The Company shall be in default withrespect to the Credit Agreement or with respect to that certain Note PurchaseAgreement dated as of August 1, 2003 by and between Crown Media Holdings, Inc.and HC Crown Corp or with respect to any other Note by the Company payable toHC Crown Corp or an affiliate thereof and such default under such facilitycould accelerate the maturity of the indebtedness thereunder and such defaultis not cured or waived within the grace period provided therein.

**§5.****         ****Remedies****.**

Upon theoccurrence of an Event of Default and at any time thereafter during thecontinuance of such Event of Default hereunder, Hallmark shall have the rightto declare the entire unpaid amount of principal and interest hereunderimmediately due and payable in full without presentation, demand or protest,each of which is hereby waived by the Company.

**§6.****         ****Subordination****.**

This Note and payment hereunder shall be subject tothe subordination provisions of that certain Subordination and SupportAgreement dated as of August 31, 2001 among the Company, Hallmark and JP MorganChase as agent for the lenders under the Credit Agreement.

**§7.****         ****Waivers****.**

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

**§7.2****       **The Company expressly waives presentmentfor payment, notice of dishonor, protest, notice of protest, diligence ofcollection, and each other notice of any kind, and hereby consent to any numberof renewals or extensions of time for payment hereof, which renewals andextensions shall not affect the liability of the Company.

**§7.3****       **The Company hereby waives and releasesall errors, defects and imperfections in any proceeding instituted by Hallmarkunder the terms hereof as well as all benefits that might accrue to the Companyby virtue of any present or future laws exempting any property, real, personalor 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 ofexecution, exemption from civil process, or extension of time for payment; andthe Company agrees that any real estate that may be levied upon pursuant to ajudgment 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 mannerdesired by Hallmark.

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**§8.****         ****Notices****.**

Each notice required tobe given to any party hereunder shall be in writing and shall be deemed to havebeen sufficiently given for all purposes when sent by certified or registeredmail, return receipt requested, to the party at its respective address asfollows or to such other address as indicated by such party in writing:
|            | **Company:**        | Crown Media Holdings, Inc.        |
|------------|---------------------|-----------------------------------|
|       |                | 12700 Ventura Blvd, Suite 200     |
|       |                | Studio City, CA 91604             |
|       |                | Phone: 818-755-2400               |
|       |                | ATTN: Executive VP, Legal Affairs |
|       |                |                              |
| ** ** | **Hallmark:**       | HC Crown Corp                     |
|       |                | 2501 McGee, MD #342               |
|       |                | Kansas City, MO 64108             |
|       |                | ATTN: Chief Financial Officer     |
|       |                |                              |
| ** ** | **With a copy to:** | Hallmark Cards, Incorporated      |
|       |                | 2501 McGee, MD #339               |
|       |                | Kansas City, MO 64108             |
|       |                | ATTN: General Counsel             |

 

**§9.****          Assignability.**

This Agreementshall be binding upon and inure to the benefit of the Company and Hallmark andtheir respective successors and assigns; provided, however, that this Note, orany portion thereof, may not be assigned by the Company without the writtenconsent of Hallmark.

**§10.****        Modifications.**

This Note may be modifiedonly in a writing signed by the Company and Hallmark.  Any amendment, extension of time or any othermodification shall not affect Company’s obligations hereunder.

**§11.****        Governing Law.**

This Note shall begoverned by and construed according to the laws of the State of Delawarewithout regard to the conflict of laws provisions thereof.

**§12.****       ****Headings****.**

The heading preceding the text of each Section hereofis inserted solely for convenience of reference and shall not constitute a partof this Note, nor shall the same affect the meaning, construction of effecthereof.

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**§13.****        Severability.**

If any provisionof this Note or the application thereof is declared by a court of competentjurisdiction to be invalid or unenforceable, the remaining provisions hereofshall be unaffected and remain valid and enforceable to the fullest extentpermitted by law.

**IN WITNESS WHEREOF**, the undersigned has executed this Noteas of the day and year first above written thereby legally binding Crown to theterms hereof.
|        | CROWN MEDIA HOLDINGS, INC. |
|--------|----------------------------|
|   |                       |
|   | By                         | /s/ Charles L. Stanford |   |
|   | Name:                      | Charles L. Stanford |
|   | Title:                     | Executive Vice President |

 

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