Exhibit 10.3


PROMISSORY
NOTE


	
  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 of
Hallmark Cards, Incorporated or its assigns, (“Hallmark”) at such place as
Hallmark may, from time to time specify in writing, the above principal amount
outstanding under this Note (as the same may be adjusted pursuant to § 2.4
hereof) together with all fees and accrued interest no later than the Maturity
Date and in accordance with Section 2 hereof.


§2.          Interest and
Adjustments.


§2.1        Loans provided hereunder shall bear interest at the
rate of LIBOR plus 300 basis points per annum from the effective date indicated
above and shall be payable in full on the date two (2) years thereafter (“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 and accrued but unpaid interest shall be
added to the principal amount annually.


§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.


§2.4        The
principal amount of this Note reflects repayments due to Hallmark pursuant to
that certain Tax Sharing Agreement dated March 11, 2003 by and between the
parties (“Tax Sharing Agreement”) and shall be increased or decreased, as
appropriate to reflect interest payable to the Internal Revenue Service in
connection with such repayments.


§3.          Repayment and
Optional Prepayment.


§3.1        Hallmark
shall offset any Estimated Crown Tax Benefits (as defined in the Tax Sharing
Agreement) first against accrued and unpaid interest and then to the unpaid
principal balance of this Note until the earlier of such time as the balance
equals zero or the Maturity Date.


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


§3.3        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 Hallmark;


(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 or with respect to any other Note by the Company payable to
HC Crown Corp or an affiliate thereof and such default under such facility
could accelerate the maturity of the indebtedness thereunder and such default
is not cured or waived within the grace period provided therein.


§5.          Remedies.


Upon the
occurrence of an Event of Default and at any time thereafter during the
continuance of such Event of Default hereunder, Hallmark 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.          Subordination.


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


§7.          Waivers.


§7.1        The failure by Hallmark 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, Hallmark 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 Hallmark, 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 Hallmark’s rights or remedies with respect to any subsequent event.


§7.2        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.


§7.3        The Company hereby waives and releases
all errors, defects and imperfections in any proceeding instituted by Hallmark
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 Hallmark.



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§8.          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 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 Agreement
shall be binding upon and inure to the benefit of the Company and Hallmark 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 Hallmark.


§10.        Modifications.


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


§11.        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 provisions thereof.


§12.        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.



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§13.        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 has executed this Note
as of the day and year first above written thereby legally binding Crown to the
terms hereof.


	
  

  	
  CROWN MEDIA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Charles L. Stanford

  	
   

  
	
   

  	
  Name:

  	
  Charles L. Stanford

  
	
   

  	
  Title:

  	
  Executive Vice President

  



 



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