EXHIBIT 10.98


 


WAIVER
AND STANDBY PURCHASE AGREEMENT


 


This WAIVER AND STANDBY PURCHASE AGREEMENT
(this “Agreement”) is entered
into as of March 21, 2006, by and among Hallmark Cards, Incorporated, a
Missouri corporation (“Hallmark”),
HC Crown Corp., a Delaware corporation (“HCC”),
Hallmark Entertainment Holdings, Inc., a Delaware corporation (“HEHI” and together with Hallmark and HCC
the “Hallmark Lenders”) and Crown Media Holdings, Inc., a Delaware
corporation (“Crown Holdings”),
Crown Media United States, LLC, a Delaware limited liability company (“CMUS”), and the subsidiaries of Crown
Holdings listed as Guarantors on the Credit Facility (the “Guarantors,” and, together with Crown
Holdings and CMUS, the “Borrowers”).


 


WHEREAS, the Borrowers are indebted to the
Hallmark Lenders pursuant to the obligations listed on Exhibit A hereto in favor of one or
more of the Hallmark Lenders (collectively, the “Subject Obligations”);


 


WHEREAS, the Hallmark Lenders are willing to
defer certain payments due under the Subject Obligations and to agree to
purchase from the Bank Lenders (as defined below) certain obligations of the
Borrowers, on the terms and subject to the conditions set forth in this
Agreement;


 


WHEREAS, the Borrowers are willing to modify
the Subject Obligations on the terms and subject to the conditions set forth in
this Agreement;


 


NOW, THEREFORE, in consideration for the
foregoing premises and the mutual covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:


 


1.                                      Definitions
and Rules of Construction.


 


(a)                                  Definitions.
As used herein:


 


“Agreement” has
the meaning set forth in the introductory paragraph.


 


“Bank Lenders”
means the lenders from time to time under the Credit Facility


 


“Borrowers” has
the meaning set forth in the introductory paragraph.


 


“Business Day” shall
mean any day other than a Saturday or Sunday, or a day on which banking institutions
in the State of New York or the State of California are authorized or obligated
by law or executive order to remain closed.


 


“CMUS”
has the meaning set forth in the introductory paragraph.


 


“Credit
Facility” means the Credit, Security, Guaranty and Pledge Agreement
dated as of August 31, 2001 as amended by Amendments 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, among Crown Media Holdings, Inc., the
guarantors named therein, the Hallmark Lenders referred to therein and JPMorgan
Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as administrative
agent.


 


“Crown
Holdings” has the meaning set forth in the introductory paragraph.


 


“Excess Cash Flow”
has the meaning set forth in Section 6(d)(ii).


 


“Guarantors”
has the meaning set forth in the introductory paragraph.


 


“Hallmark”
has the meaning set forth in the introductory paragraph.


 


“Hallmark
Lenders” has the meaning set forth in the introductory paragraph.


 


“HCC”
has the meaning set forth in the introductory paragraph.


 


“HEHI”
has the meaning set forth in the introductory paragraph.


 


“Indebtedness”
includes all items that in accordance with generally acceptable accounting
principles would be included in determining total liabilities as shown on the
liability side of a balance sheet as at the date as of which debt is to be
determined, or to which reference should be made by footnotes thereto, but (a) also
includes reimbursement obligations, guaranties, endorsements (other than
endorsements for collection or deposit in the ordinary course of business), and
other contingent obligations in respect of, or to purchase or otherwise acquire
or advance funds on account of or otherwise service, obligations of others; and
(b) excludes any amounts payable to employees or directors of the
Borrowers in regard to restricted stock units.


 


“Library Transaction Payable” has
the meaning set forth in Exhibit A.


 


“Loan
Documents” include this Agreement, the Notes, from and after the
date as of which Hallmark is deemed to have purchased a participation in the “Obligations”
under the Credit Facility or purchases the Indebtedness under the Credit
Facility pursuant to Section 3, the Credit Facility, and any and all other
writings which now or hereafter evidence or secure any portion of the Subject
Obligations, and any amendments, modifications or substitutions of or for the
foregoing.


 


“Notes”
means the 2001 Note, the 10.25% Note, the 2005 Note and the 2006 Note.


 


“Participated
Obligation” has the meaning set forth in Exhibit A.


 


“Released
Matters” has the meaning set forth in Section 8.


 


“Released
Parties” has the meaning set forth in Section 8.


 


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“Security
Interest” includes any lien, charge, mortgage, pledge, assignment,
or other encumbrance, retained title, or security interest, whether created or
arising voluntarily, involuntarily or by operation of law.


 


“Standby
Purchaser” has the meaning set forth in Section 3.


 


“Subject
Obligations” has the meaning set forth in the recitals hereto.


 


“10.25%
Note” has the meaning set forth in Exhibit A.


 


“2001 Note”
has the meaning set forth in Exhibit A.


 


“2005 Note” has the meaning
set forth in Exhibit A.


 


“2006 Note” has the meaning
set forth in Section 7(b).


 


“Waiver
Period” has the meaning set forth in Section 2(a).


 


“Waiver
Termination Date” has the meaning set forth in Section 2(c)


 


(b)                                  Agreement
Controlling. In the event of any inconsistency between the terms of this
Agreement and the Subject Obligations or any other Loan Documents, this
Agreement shall govern. Each Borrower acknowledges that it has consulted with
counsel and with such other experts and advisors as it has deemed necessary in
connection with the negotiation, execution and delivery of this Agreement. This
Agreement shall be construed without regard to any presumption or rule requiring
that it be construed against the party causing this Agreement or any part hereof
to be drafted.


 


(c)                                  Miscellaneous.
The headings herein are for convenience only and shall not be deemed to be part of
this Agreement.


 


2.                                      Agreement
to Waive.


 


(a)                                  Waiver.
Subject to Paragraph (b) of this Section 2:


 


(i)                                     Except
as set forth in clause (b)(i) below and Section 6, all payments due
from Borrower with respect to the Subject Obligations during the period (the “Waiver Period”) commencing on the date
hereof and ending on the Waiver Termination Date, shall be deferred to the
Waiver Termination Date, whereupon such amounts shall become immediately due
and payable;


 


(ii)                                  During
the Waiver Period, the Hallmark Lenders shall not:


 


(1)                                  accelerate
the maturity of the Subject Obligations or initiate proceedings for the
collection of the Subject Obligations or foreclose with respect to the
collateral security therefor; and


 


(2)                                  file,
or join in the filing of, any involuntary petition in bankruptcy with respect
to the Borrowers, or any of them, or otherwise


 


3

















 


initiate or participate in similar insolvency
reorganization, or moratorium proceedings for the benefit of creditors of the
Borrowers or any of them.


 


(b)                                  Permitted
Actions. Notwithstanding paragraph (a) of this Section 2, during
the Waiver Period:


 


(i)                                               the
Borrowers shall pay, and Hallmark shall be entitled to collect, accrued
interest in respect of the Participated Obligation in accordance with the terms
thereof (to the extent not prohibited by the Credit Facility), which from and
after the maturity of the Participated Obligation through the Waiver
Termination Date shall accrue at the non-default rate;


 


(ii)                                            interest
on the Subject Obligations shall continue to accrue in accordance with the
terms and conditions of the Subject Obligations (as the same are modified, amended
and restated in accordance with this Agreement); provided that with respect to
the 2005 Note, interest shall continue to accrue from and after the Maturity
Date (as defined therein) at the rate set forth therein;


 


(iii)                                         the
Hallmark Lenders may take such action as not prohibited by the terms of
the Subject Obligations to further protect or perfect any lien on collateral
securing the Subject Obligations; and


 


(iv)                                        nothing
in this Agreement shall limit any right any of the Hallmark Lenders may have
to offset against the Subject Obligations, amounts that it owes any Borrower pursuant
to the Tax Sharing Agreement or pursuant to that certain letter dated October 7,
2005 in which Hallmark agreed to participate in the NICC settlement, or as
otherwise agreed by Crown Holdings.


 


(c)                                  Waiver
Termination Date. This Waiver shall terminate automatically on May 31,
2007, unless terminated earlier as set forth herein and such date of actual
termination shall be the “Waiver Termination
Date”. Hallmark Lenders shall have the right to terminate this
Waiver upon written notice upon the occurrence of any of the following in
clauses (i) through (iv). The Waiver shall automatically terminate upon
the occurrence of either of (v) or (vi):


 


(i)                                               Any
Borrower shall fail to pay any principal or interest, regardless of amount, due
in respect of any Indebtedness, when and as the same shall become due and
payable (and after the expiration of any cure periods), (other than
Indebtedness under the Subject Obligations, including the Credit Facility) with
an aggregate principal amount in excess of $5 million, or any other event or
condition occurs that results in any such Indebtedness becoming due prior to
its scheduled maturity provided, however, that the Waiver will not terminate if
the Borrower reduces the principal amount of such aggregate Indebtedness to $5
million or less within five Business Days of the Lender’s written notice of
termination;


 


(ii)                                            CMUS
shall default in the payment of licensing fees pursuant to that certain Second
Amended and Restated Program License Agreement dated as


 


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of January 1, 2005 with RHI
Entertainment, LLC (as it may be amended from time to time);


 


(iii)                                         the
representation and warranty of any Borrower contained herein shall have been
false or misleading in any material respect;


 


(iv)                                        any
Borrower shall fail to make the payments required by Section 2(b)(i) hereof
or to perform any of its covenants or obligations contained herein within
five (5) Business Days after notice thereof by the Hallmark Lenders;


 


(v)                                           An
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (1) relief in respect
of any Borrower or any subsidiary of any Borrower, or of a substantial part of
the property or assets of any Borrower or any subsidiary of any Borrower, under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (2) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Borrower or any
subsidiary of any Borrower or for a substantial part of the property or
assets of any Borrower or any subsidiary of any Borrower or (3) the
winding-up or liquidation of any Borrower or any subsidiary of any Borrower;
and


 


(vi)                                        any
Borrower or any subsidiary of any Borrower shall (1) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law, (2) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (c)(vi) above, (3) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Borrower or any
subsidiary of any Borrower or for a substantial part of the property or
assets of any Borrower or any subsidiary of any Borrower, (4) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (5) make a general assignment for the benefit of creditors,
(6) take any action for the purpose of effecting any of the foregoing.


 


3.                                      Standby
Purchase Obligation. If the Bank Lenders accelerate any of the Indebtedness
of Crown Holdings under the Credit Facility, or seek to collect any
Indebtedness under, or exercise any remedies pursuant to the Credit Facility,
then Crown Holdings may elect to provide prompt written notice of such
action to Hallmark exercising its rights under this Section 3. Within
three (3) Business Days’ of receipt of a notice pursuant to the preceding
sentence, Hallmark or its designated subsidiary (the “Standby
Purchaser”) shall exercise its option to purchase all of the
outstanding Indebtedness under the Credit Facility, together with all other
interests of the Bank Lenders thereunder pursuant to that certain Amendment No. 9
to the Credit Facility, dated as of March 21, 2006, among the Borrowers,
Hallmark and the Bank Lenders. Any Indebtedness so acquired shall be deemed to
be Participated Obligations for


 


5

















 


purposes of this Agreement. All
expenses and fees in connection with this purchase by the Standby Purchaser
shall be added to the principal amount of the Participated Obligations.


 


4.                                      Representations and Warranties. Each
Borrower hereby jointly and severally represents and warrants to each Hallmark
Lender as follows:


 


(a)                                  Power; Authorization. Such
Borrower has the power, and has been duly authorized by all requisite action,
to execute and deliver this Agreement and to perform its respective
obligations hereunder. Such Borrower has duly executed and delivered this
Agreement.


 


(b)                                  Enforceability.
This Agreement is the legal, valid and binding obligation of such Borrower,
enforceable against such Borrower in accordance with its terms, subject to (i) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors’ rights generally, and (ii) general principles of
equity, regardless of whether such enforcement is considered in a proceeding in
equity or at law.


 


(c)                                  No
Violation. The execution, delivery and performance of this Agreement by the
Borrowers does not and will not:  (i) violate
any law, rule, regulation or court order to which any such Borrower is subject;
(ii) conflict with or result in a breach of any such Borrower’s
certificate of incorporation and bylaws if such Borrower is a corporation or
other comparable organizational document if such Borrower is not a corporation;
(iii) conflict with, result in a material breach or default of, or otherwise
accelerate the performance required under any material agreement or instrument
to which any such Borrower is party or by which it or its properties are bound;
or (iv) result in the creation or imposition of any security interest or
lien on any material property of any such Borrower, whether now owned or
hereafter acquired.


 


(d)                                  Obligations
Absolute. The obligation of the Borrowers to repay the Subject Obligations
(as modified or amended and restated hereby), together with all interest
accrued thereon, and other charges, and otherwise to pay and perform the
Subject Obligations (as modified or amended and restated hereby) is absolute
and unconditional, and there exists no right of set-off or recoupment,
counterclaim or defense of any nature whatsoever to payment and performance of
the Subject Obligations (as modified or amended and restated hereby).


 


(e)                                  Acknowledgement of Indebtedness.


 


(i)                                               Each
of Crown Holdings and CMUS acknowledges that it is validly indebted to HCC
pursuant to the 2001 Note, and that the outstanding principal amount of the
2001 Note is $81,067,290.49, as calculated on January 1, 2005, and the
accrued but unpaid interest for the period January 1, 2005 through February 28,
2006 is $6,200,297.91.


 


(ii)                                            Crown
Holdings acknowledges that it is validly indebted to HCC pursuant to the 10.25%
Note, and that the accreted value of the 10.25% Note, as calculated on January 31,
2006, is $513,558,634.00 and the accrued but unpaid


 


6

















 


interest for the
period February 1, 2006 through February 28, 2006 is $4,386,646.67.


 


(iii)                                         Crown
Holdings acknowledges that as of March 1, 2006 it is validly indebted to
HEHI pursuant to the Library Transaction Payable, and that the outstanding
amount of the Library Transaction Payable is $70,414,087.87.


 


(iv)                                        CMUS
acknowledges that as of March 1, 2006 it is validly indebted to HEHI
pursuant to the 2005 Note, and that the outstanding principal amount of the
2005 Note is $132,785,424.00 and the accrued but unpaid interest is
$4,043,284.00.


 


5.                                      Addition of Accrued Interest to Principal
Amount. The accrued but unpaid interest with respect to the 2001
Note set forth in Section 4(e) above is hereby added to the principal
amount of the 2001 Note and the interest will be added to the principal amount
annually hereafter. The accrued but unpaid interest with respect to the 2005
Note set forth in Section 4(e) above is hereby added to the principal
amount of the 2005 Note and the interest will be added to the principal amount
annually hereafter. The accrued but unpaid interest with respect to the 2006
Note will be added to the principal amount annually hereafter.


 


6.                                      Covenants
of Borrowers.


 


(a)                                  Compliance with Loan Documents. The
Borrowers shall comply with the covenants and obligations of the Borrowers
under the Loan Documents.


 


(b)                                  Further Assurance. The Borrowers
shall execute such other and further documents and instruments as each Hallmark
Lender may request to implement the provisions of this Agreement.


 


(c)                                  Refinancing: 
Borrower shall use its commercially reasonable efforts to
refinance the Subject Obligations as soon as reasonably practicable after the
date hereof.


 


(d)                                  Prepayment
of Subject Obligations from Excess Cash Flow.


 


(i)                                               Within
one business days of the receipt of (or in the case of clause (d)(ii)(4) below
the determination of the existence of) any Excess Cash Flow, Borrow shall, in
an amount equal to the Excess Cash Flow, either (x) pay amounts due under the
Credit Facility, or (y) repay the Subject Obligations. Such repayment of the
Subject Obligations shall be applied in the following order:


 


(1)                                  pro
rata to accrued but unpaid interest on the 2001 Note, the 2005 Note, and the
2006 Note, then


 


(2)                                  to
the principal amount of the 2001 Note, then


 


(3)                                  to
the principal amount of the 2005 Note, then


 


(4)                                  to
the principal amount of the 2006 Note, then


 


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(5)                                  to
the Accreted Value of the 10.25% Note, and finally


 


(6)                                  to
the Participated Obligations.


 


(ii)                                            “Excess Cash Flow” shall mean (without
duplication):


 


(1)                                  the
net cash proceeds from the issuance of any equity, securities or debt
instruments by any of the Borrowers;


 


(2)                                  the
net cash proceeds from the sale, transfer or lease by the Borrowers of any of
their assets outside of the ordinary course of business; and


 


(3)                                  if
positive, the consolidated net cash flow from operations of Crown Holdings for
any calendar quarter within the Waiver Period as set forth in any earnings
press release filed on Form 8-K, on any quarterly report on Form 10-Q
or annual report on Form 10-K, less cash funds used to pay current
operating expenses and to pay or establish reasonable reserves for future
expenses, Indebtedness payments, and capital improvements and replacements, as
determined the Board of Directors.


 


7.                                      Conditions Precedent to Effectiveness of
Agreement. This Agreement shall not be effective as against any
Hallmark Lender unless and until each of the following conditions shall have
been satisfied in the Hallmark Lenders’ sole discretion or waived by the
Hallmark Lender for whose sole benefit such conditions exist:


 


(a)                                  Authorization. The Hallmark
Lenders shall have received a certified copy of all action taken by the
Borrowers to authorize the execution, delivery, and performance of this
Agreement and the other Loan Documents (including the consent of a majority of
the members of Crown Holding’s Board of Directors that have not been nominated
by Hallmark or any of its subsidiaries (other than the Borrower and their
subsidiaries)), and such other authorization documents as the Hallmark Lenders
shall reasonably require.


 


(b)                                  Execution and Delivery of the 2006 Note.
The Library Transaction Payable shall be evidenced by a promissory note
substantially in the form of the 2005 Note (the “2006 Note”).


 


8.                                      Release
of Claims and Waiver. Each Borrower hereby releases, remits, acquits and
forever discharges each Hallmark Lender and each Hallmark Lender’s employees,
agents, representatives, consultants, attorneys, fiduciaries, servants,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions (all of the
foregoing hereinafter called the “Released Parties”),
from any and all actions and causes of action, judgments, executions, suits,
debts, claims, demands, liabilities, obligations, damages and expenses of any
and every character, known or unknown, direct and/or indirect, at law or in
equity, of whatsoever kind or nature, whether heretofore or hereafter arising,
for or because of any manner or things done, which were omitted or suffered to
be done by any of the Released Parties prior to and including the date of
execution hereof, and which also


 


8

















 


in any way directly or
indirectly arise out of or were in any way connected to the Released Parties’
capacity as the beneficiary of an obligation of one or more of the Borrowers
under this Agreement, the Subject Obligations and/or any other Loan Document
heretofore executed, including claims relating to ‘lender liability’ (all of
the foregoing hereinafter called the “Released Matters”).
The Borrowers acknowledge that the Hallmark Lenders’ agreement to waive
contained in Section 2 of this Agreement and Hallmark’s agreement to purchase
the outstanding Indebtedness and the Bank Lenders’ other interests under the
Credit Facility contained in Section 3 of this Agreement are intended to
be in full satisfaction of all or any alleged injuries or damages arising in
connection with the Released Matters. Each Borrower represents and warrants to
each Hallmark Lender that it has not purported to transfer, assign or otherwise
convey any right, title or interest of such Borrower in any Released Matter to
any other Person and that the foregoing constitutes a full and complete release
of all Released Matters.


 


9.                                      Miscellaneous.


 


(a)                                  No
Waiver By Hallmark Lenders. Notwithstanding any course of dealing between
the parties, neither failure nor delay on the part of any Hallmark Lender
to exercise any right, power, or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power, or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. No notice to or demand upon
the Borrowers shall be deemed to be a waiver of the obligation of the Borrowers
or of the right of any Hallmark Lender to take further action without notice or
demand. The agreement to forebear by the Hallmark Lenders contained in this
Agreement shall in no way obligate (or create a course of dealing obligating)
any Hallmark Lender to similarly waive after the Waiver Termination Date.


 


(b)                                  Benefit of Agreement. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto, their respective successors and assigns. No other person
or entity shall be entitled to claim any right or benefit hereunder, including,
without limitation, the status of a third-party beneficiary of this Agreement.


 


(c)                                  Integration. This Agreement,
together with the Loan Documents heretofore executed, constitute the entire
agreement and understanding among the parties relating to the subject matter
hereof, and supersede all prior proposals, negotiations, agreements and
understandings relating to such subject matter. In entering into this
Agreement, the Borrowers acknowledges they are relying on no statement,
representation, warranty, covenant or agreement of any kind made by any
Hallmark Lender or any employee or agent of the Hallmark Lenders, except for
the agreements of the Hallmark Lenders set forth herein.


 


(d)                                  Severability. If any provision of
this Agreement shall be held invalid or unenforceable in whole or in part in
any jurisdiction, such provision shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or enforceability without in any manner
affecting the validity or enforceability of such provision in any other
jurisdiction or the remaining provisions of this Agreement in any jurisdiction.
Furthermore, in lieu of any such invalid or unenforceable term or provision,
the parties hereto intend that there


 


9

















 


shall be added
as a part of this Agreement a provision as similar in terms to such invalid
or unenforceable provision as may be possible and be valid and
enforceable.


 


(e)                                  Governing Law. This Agreement
shall be governed by and construed in accordance with the internal substantive
laws of the State of New York, without regard to the choice of law principles
of such State.


 


(f)                                    Counterparts; Faxed Signatures. This
Agreement may be executed in any number of counterparts and by different
parties to this Agreement on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed to be an original signature hereto.


 


(g)                                 Notices. All notices and other
communications given or made pursuant hereto shall be in writing and shall be
deemed to have been duly given or made and shall be effective (i) upon
receipt if delivered personally, (ii) upon receipt of a transmission
confirmation if sent by facsimile (with a confirming copy sent by overnight
courier) during normal business hours of a business day, otherwise on the next
business day, and (iii) on the next business day if sent by Federal
Express, United Parcel Service, Express Mail or other reputable overnight
courier, charges prepaid, to the parties at the following addresses (or at such
other address for a party as shall be specified by notice):


 


If to the
Borrowers:


 


Crown Media
Holdings, Inc.


12700 Ventura
Blvd


Studio City,
CA  91302


Attn:                    Charles
Stanford, Esq.


Fax:                           818-755-2469


 


If to the
Hallmark Lenders or the Standby Purchaser:


 


c/o Hallmark
Cards Incorporated


2501 McGee
Trafficway


PO Box 419126,
Mail Drop No. 339


Kansas City,
MO 64141


Attn:  General Counsel


Fax:  816-274-7171


 


(h)                                 Survival. All representations,
warranties, covenants, agreements, undertakings, waivers and releases of the
Borrowers contained herein shall survive the termination of the Waiver Period
and payment in full of the obligations of the Borrowers under the Subject
Obligations.


 


(i)                                    Amendment. No amendment, modification,
rescission, waiver or release of any provision of this Agreement shall be
effective unless the same shall be in writing and signed by the parties hereto.


 


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10.                               VENUE; JURISDICTION; JURY TRIAL WAIVER.
THE HALLMARK LENDERS AND BORROWER EACH HEREBY UNCONDITIONALLY AND IRREVOCABLY: (A) CONSENT
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF NEW
YORK; (B) AGREE THAT VENUE SHALL BE PROPER IN ANY COURT OF COMPETENT
JURISDICTION LOCATED IN THE STATE OF NEW YORK; AND (C) WAIVE THEIR RIGHT
TO TRIAL BY JURY IN ANY CONTROVERSY ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENT(S).


 


[Remainder of page intentionally
left blank.]


 


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IN WITNESS WHEREOF, the parties hereto have
executed this Agreement under seal as of the day and year first above written.


 


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  CROWN MEDIA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Aliber

  	
   

  
	
   

  	
   

  	
  Name: William J. Aliber

  
	
   

  	
   

  	
  Title: EVP/CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CROWN MEDIA UNITED STATES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles Stanford

  	
   

  
	
   

  	
   

  	
  Name: Charles Stanford

  
	
   

  	
   

  	
  Title: VP

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  CM INTERMEDIARY, LLC

  
	
   

  	
  CITI TEEVEE, LLC

  
	
   

  	
  DOONE CITY PICTURES, LLC

  
	
   

  	
  WAYZGOOSE CONCERT SERVICES, B.V.

  
	
   

  	
  CROWN MEDIA DISTRIBUTION, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles Stanford

  	
   

  
	
   

  	
   

  	
  Name: Charles Stanford

  
	
   

  	
   

  	
  Title: VP

  



 


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  HALLMARK LENDERS:

  
	
   

  	
   

  
	
   

  	
  HALLMARK CARDS, INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Gardner

  	
   

  
	
   

  	
   

  	
  Name: Brian Gardner

  
	
   

  	
   

  	
  Title: Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HC CROWN CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Gardner

  	
   

  
	
   

  	
   

  	
  Name: Brian Gardner

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HALLMARK
  ENTERTAINMENT HOLDINGS, 

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Gardner

  	
   

  
	
   

  	
   

  	
  Name: Brian Gardner

  
	
   

  	
   

  	
  Title: Vice President

  



 


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EXHIBIT A


 


SUBJECT
OBLIGATIONS


 


1.                                       The Promissory Note, dated as of December 14,
2001, of Crown Holdings, and guaranteed by CMUS, in the original principal
amount of $75 million payable to HCC (the “2001
Note”)


 


2.                                       The 10.25%
Senior Unsecured Discount Note,
issue date August 5, 2003, of Crown Holdings, in the initial accreted
value of $400 million, payable to HCC (the “10.25%
Note”).


 


3.                                       The $70 million account payable of Crown
Holdings to HEHI arising out of the sale by HEHI to such obligor of a “film
library” (the “Library Transaction Payable”),
which shall be converted to the 2006 Note.


 


4.                                       The Promissory
Note, dated as of October 1, 2005, of CMUS, in the original principal
amount of $132,785,424, originally payable to Hallmark Entertainment
Distribution, LLC (which has been assigned to HEHI) (the “2005 Note”).


 


5.                                       All Obligations
(as such term is defined in the Credit Facility) of the Borrowers to Hallmark
under the Credit Facility, by virtue of Hallmark’s deemed purchase of a
participation in the Obligations pursuant to Section 14.1 of Amendment No. 8
to the Credit Facility or pursuant to Section 13.3 (l) of Amendment No. 9
to the Credit Facility (the “Participated
Obligation”).


 


14