**Exhibit 10.1**

 

**PROMISSORY NOTE**

 
| Principal Amount: **$70,414,087.87** |   | Date:  | As of March 21, 2006 |
|--------------------------------------|--------|--------|----------------------|
|                                 |   |   | Wilmington, Delaware |

 

**§1.          Promise to Pay.**

 

For value received, the Company hereby promises to pay to the order ofHallmark Entertainment Holdings, Inc. or its assigns, (“Holdings”) at suchplace as Holdings may, from time to time specify in writing, the aboveprincipal amount outstanding under this Note together with all fees and accruedinterest no later than the Maturity Date and in accordance with Section 2 hereof.

 

**§2.          Interest.**

 

**§2.1**        Loans provided hereunder shall bearinterest at the rate of LIBOR plus 300 basis points per annum from the effectivedate of March 21, 2006 and shall be payable in full on May 31, 2007 (“MaturityDate”).

 

**§2.2**        All calculations of interest and feesshall be made on the basis of actual number of days elapsed in a 360-day yearand accrued but unpaid interest shall be added to the principal amount annually.)

 

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

 

**§3.          Repayment and Optional Prepayment.**

 

**§3.1**        The Company shall pay to Holdings asingle principal payment together with all accrued and unpaid interest on theMaturity Date.

 

**§3.2**        The Company shall have the privilege atany time and from time to time, to prepay this Note in whole or in part withoutpremium or penalty to the extent permitted by that certain Credit and SecurityAgreement dated as of August 31, 2001 with JPMorgan Chase as agent (“CreditAgreement”).

 

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

 

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

 

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

 

(ii)           The Company shallbe in default with respect to the Credit Agreement or with respect to thatcertain Note Purchase Agreement dated as of August 1, 2003 by and between CrownMedia Holdings, Inc. and HC Crown Corp and such default under either facilitycould accelerate the maturity of the indebtedness thereunder and such defaultis not cured or waived within the grace period provided therein.

 

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**5.             Remedies.**

 

Upon theoccurrence of an Event of Default and at any time thereafter during thecontinuance of such Event of Default hereunder, Holdings 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           Waivers.**

 

**§6.1       **Thefailure by Holdings to exercise any right or remedy available hereunder in theEvent of Default shall in no event be construed as a waiver or release of thesame. Likewise, Holdings shall not, by any act or omission or commission, bedeemed to waive any right hereunder unless such waiver is evidenced in writingand signed by Holdings, and then only to the extent specifically set forth insuch writing. Moreover, a waiver with respect to any one event shall not beconstrued as continuing or as a bar to or waiver of Holdings’ rights orremedies with respect to any subsequent event.

 

**§6.2       **TheCompany 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 paymenthereof, which renewals and extensions shall not affect the liability of theCompany.

 

**§6.3**        The Company hereby waives and releasesall errors, defects and imperfections in any proceeding instituted by Holdingsunder 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 Holdings.

 

**§7.          Notices.**

 

Each noticerequired to be given to any party hereunder shall be in writing and shall bedeemed to have been sufficiently given for all purposes when sent by certifiedor registered mail, return receipt requested, to the party at its respectiveaddress as follows or to such other address as indicated by such party inwriting:

 
| **Company:**  | Crown Media Holdings, Inc.            |
|---------------|---------------------------------------|
|          | 12700  Ventura Blvd, Suite 200        |
|          | Studio City,  CA 91604                |
|          | Phone:  818-755-2400                  |
|          | ATTN:  Executive VP, Legal Affairs    |
|          |                                  |
| **Holdings:** | Hallmark Entertainment Holdings, Inc. |
|          | 2501 McGee,  MD #342                  |
|          | Kansas City,  MO 64108                |
|          | ATTN: Chief  Financial Officer        |

 

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

 

**§9.          Modifications.**

 

This Note maybe modified only in a writing signed by the Company and Holdings. Any amendment,extension of time or any other modification shall not affect Company’sobligations hereunder. 

 

**§10.        Governing Law.**

 

This Noteshall be governed by and construed according to the laws of the State ofDelaware without regard to the conflict of laws provisions thereof.

 

**§11.        Headings.**

 

The headingpreceding the text of each Section hereof is inserted solely for convenience ofreference and shall not constitute a part of this Note, nor shall the sameaffect the meaning, construction of effect hereof.

 

**§12.        Severability.**

 

If anyprovision of this Note or the application thereof is declared by a court ofcompetent jurisdiction to be invalid or unenforceable, the remaining provisionshereof shall be unaffected and remain valid and enforceable to the fullestextent permitted by law.

 

**IN WITNESS WHEREOF,** the undersigned officershave executed this Note as of the day and year first above written therebylegally binding such party to the terms hereof.

 

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

 

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