Exhibit 10.3


 


Guaranty Commitment


 


This Guaranty Commitment dated as of September 2,
2008 is by and between Hallmark Cards, Incorporated (“Hallmark”) and Crown
Media United States, LLC (“CMUS”).


 


WHEREAS, CMUS desires to enter into that
certain Lease Agreement dated as of September 8, 2008 by and between
Paramount Group, Inc. as agent for 1325 Avenue of Americas, L.P.
(“Landlord”) and CMUS for the office space at 1325 Avenue of the Americas, New
York, New York 10019 (the “Lease Agreement”); and


 


WHEREAS, as a condition of executing the
Lease Agreement, the Landlord has required that CMUS provide a guaranty of the
Lease Agreement by Hallmark; and


 


WHEREAS, Hallmark has agreed to provide such
a guaranty upon the terms and conditions set forth herein (the “Guaranty”);


 


NOW, THEREFORE, the parties agree hereto as
follows:


 


1.             Guaranty. Hallmark agrees to provide the Guaranty
which shall contain terms and conditions agreeable to Landlord and Hallmark.


 


2.             Guaranty Fee. As an inducement for Hallmark to
provide this Guaranty, CMUS shall pay to Hallmark a fee in the amount of      %
per annum of the outstanding Lease Obligation (the “Guaranty Fee”). The
Guaranty Fee shall be paid first upon the commencement of the Lease Agreement
and then calculated for a 6-month period and paid in advance thereafter. The
initial Lease Obligation amount shall be                     .
For purposes of calculating the Guaranty Fee, the first Guaranty Fee shall be
based on the initial Lease Obligation amount and then on a Lease Obligation amount
reduced by                        
at the conclusion of each 6-month period.


 


3.             Payment Terms. In the event that Hallmark is
required to pay any amounts pursuant to the Guaranty, CMUS shall be obligated
to reimburse Hallmark immediately for (i) any amount paid by Hallmark; (ii) any
fees and charges in connection with such payment; (iii) interest on such
amount for each day from and including the date of payment at a rate per annum
equal to the lesser of (A) Libor + 5% and (B) the highest rate permitted
by applicable law; and (iv) Hallmark’s costs and expenses in connection
with the protection or enforcement of its rights under this Agreement.


 


4.             Obligations Absolute. CMUS’ payment obligations
under this Agreement are absolute, unconditional and irrevocable and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances including, without limitation: (i) any lack of validity,
enforceability or legal effect of the Lease Agreement or this Agreement or any
term or provision therein or herein; (ii) any claim that any claim for
payment or payment made pursuant to the Guaranty was inappropriate or
inaccurate in any respect; (iii) the existence of any claim, set-off,
defense or other right that CMUS may have against Landlord or Hallmark; and (iv) any
event, circumstance, or conduct whatsoever that might constitute a legal or
equitable defense to CMUS’ obligations hereunder.


 

















 


5.             Security. Any obligations arising hereunder shall
be included on Schedule A to that certain Security and Pledge Agreement dated
as of July 27, 2007, by and among Crown Media Holdings, Inc. and its
subsidiaries and Hallmark and various of its subsidiaries (“Security
Agreement”) and consequently such obligations shall be secured by the Collateral
(as defined in the Security Agreement).


 


6.             Indemnification. CMUS shall indemnify and hold
harmless Hallmark, its subsidiaries and each of their respective directors,
officers, employees and agents (each, including Hallmark, an “Indemnified
Person”) from and against any and all claims, suits, judgments, costs, losses,
fines, penalties, liabilities, and expenses, and legal fees, charges and
disbursements of any counsel for any Indemnified Person, arising out of, in connection with, or as a result of: (i) any
payment or claim for payment pursuant to this Agreement; (ii) any action
or proceeding arising out of or in connection with any payment or claim for
payment pursuant to this Agreement; (iii) any third party seeking to
enforce the rights of Landlord or any other beneficiary; (iv) the fraud,
forgery or illegal action of parties other than the Indemnified Person; (v) the
enforcement of this Agreement or any of Hallmark’s rights or remedies under or
in connection with this Agreement.


 


7.             Representation and Warranties. CMUS hereby
represents and warrants as of the date of this Agreement that: (a) it has
all necessary power and authority to enter into and perform this Agreement; (b) it
has obtained all authorizations, consents and approvals required for it to
enter into and perform this Agreement in accordance with its terms; (c) this
Agreement constitutes the legal, valid and binding obligation of CMUS
enforceable against it in accordance with its terms; (d) the execution,
delivery and performance of this Agreement by CMUS does not and will not
contravene (i) its charter, by-laws or other organizational documents, (ii) any
order or writ binding on or affecting CMUS or its properties, or (iii) any
agreement or arrangement to which CMUS is a party or by which it or its
properties may otherwise be bound, the Contravention of which agreement or
arrangement would have a material adverse effect on CMUS.


 


8.             Lease Amendment. CMUS shall not make any
amendments to or modify or waive any terms of the Lease Agreement without the
prior written consent of Hallmark. Further, CMUS shall not be permitted to make
modifications to the lease space in excess of $400,000 in the aggregate for all
improvements during the term of the Lease Agreement without the prior written
consent of-Hallmark.


 


9.             Amendment; Waiver. Hallmark shall not be deemed
to have amended or modified any term hereof, or waived any of its rights unless
Hallmark consents in writing to such amendment, modification or waiver. No such
waiver, unless expressly stated therein, shall be effective as to any
transaction which occurs subsequent to such waiver, nor as to any continuance
of a breach after such waiver. Hallmark’s consent to any amendment, waiver, or
modification does not mean that Hallmark shall consent or has consented to any
amendment, modification, or waiver of a term of the Lease Agreement unless
explicitly stated therein.


 


10.           Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Missouri, without regard
to principles of conflict of laws.


 


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11.         No Third Party Beneficiary. This Agreement
shall be binding upon and inure to the benefit of Hallmark and CMUS and their
respective successors and permitted assigns. This Agreement shall not confer
any right or benefit upon any person or entity (including the Landlord) other
than the parties to this Agreement, the Indemnified Persons and their
respective successors and permitted assigns.


 


12.           No Assignment. CMUS may not assign or
transfer this Agreement or the benefit of the Guaranty without the prior
written consent of Hallmark. A change in control or a sale of substantially all
of the assets of CMUS shall be considered an assignment. Any attempted assignment
or transfer without the prior written consent of Hallmark shall be void.


 


IN WITNESS WHEREOF, this Guaranty Commitment
is executed by the parties hereto as of the date first written above.


 


	
   

  	
  CROWN MEDIA UNITED STATES, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  C. Stanford

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HALLMARK CARDS, INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


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GUARANTY


 


Hallmark Cards, Incorporated, a Missouri
corporation (hereinafter called “Guarantor”), having an office at 2501 McGee,
MD 339, Kansas City, MO 64108, has requested Paramount
Group, Inc., as agent for 1325 Avenue of the Americas, L.P. (hereinafter
called “Landlord”), having an office c/o Paramount Group, Inc., 1633
Broadway, Suite 1801, New York, NY 10019, to accept this Guaranty for that
certain lease between Landlord and Crown Media United States, LLC, as Tenant
(as the same may hereafter be amended, the “Lease”), covering certain premises
(Premises) as more particularly described in the Lease in the building
(Building) known as 1325 Avenue of the Americas, New York, New York. In order
to induce Landlord to enter into the Lease and in consideration of Landlord’s
entering into the Lease and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
guarantees, unconditionally and absolutely, to Landlord, its successors and
assigns (without requiring any notice of nonpayment, nonkeeping, nonperformance
or nonobservance or proof of notice or demand whereby to charge Guarantor, all
of which Guarantor hereby expressly waives), the full and faithful keeping,
performance and observance of all of the covenants, agreements, terms,
provisions and conditions of the Lease provided to be kept, performed and
observed by Tenant (expressly including, without being limited to, the payment
as and when due of fixed rent, additional rent, charges, interest and damages
payable by Tenant under the Lease) and the payment of any and all other damages
for which Tenant shall be liable by reason of any act or omission contrary to
any of said covenants, agreements, terms, provisions or conditions.


 


Guarantor acknowledges that additional
consideration for Guarantor giving this Guaranty to Landlord is the fact that
Guarantor indirectly owns a majority of Tenant and that Guarantor is issuing
this Guaranty to induce Landlord to enter into the Lease with Tenant. As a further
inducement to Landlord to enter into the Lease and in consideration thereof,
Guarantor represents and warrants that this Guaranty has been duly authorized
by all necessary corporate action on Guarantor’s part, has been duly executed
and delivered by a duly authorized officer, and constitutes Guarantor’s valid
and legally binding agreement in accordance with its terms.


 


As a further inducement to Landlord to enter
into the Lease and in consideration thereof, Guarantor hereby expressly
covenants and acknowledges as follows:


 


1.                                       The obligations hereunder of Guarantor shall
not be terminated or affected in any way or manner whatsoever by reason of
Landlord’s resort, or Landlord’s omission to resort, to any summary or other
proceedings, actions or remedies for the


 


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enforcement of any of
Landlord’s rights under the Lease or with respect to the Premises thereby
demised or by reason of any extensions of time or indulgences granted by
Landlord, or by reason of the assignment or surrender of all or any part of the
Lease or the term and estate thereby granted or all or any part of the Premises
demised thereby except to the extent that Tenant is released in writing by
Landlord from any obligation in connection with any such assignment or
surrender. The liability of Guarantor is coextensive with that of Tenant and
also joint and several, and action or suit may be brought against Guarantor and
carried to final judgment and/or completion and recovery had, either with or without
making Tenant a party thereto. Insofar as the payment by Tenant of any sums of
money to Landlord is involved, this Guaranty is a guaranty of payment and not
of collection and shall remain in full force and effect until payment in full
to Landlord of all sums payable under this Lease. Guarantor waives any right to
require that any action be brought against Tenant or to require that resort be
had to any security or to any other credit in favor of Tenant. Landlord shall
not be required to apply any security deposit held by it to the reduction of
any of Guarantor’s obligations hereunder and the amount of any such security
deposit as may be applied by Landlord shall not be credited to the benefit of
Guarantor.


 


2.                                       Guarantor acknowledges and agrees that this
Guaranty and Guarantor’s obligations under this Guaranty are and shall at all
times continue to be absolute, present, primary and unconditional in all
respects, and shall at all times be valid and enforceable irrespective of any
other agreements or circumstances of any nature whatsoever which might
otherwise constitute a defense to this Guaranty and the obligations of
Guarantor under this Guaranty or the obligations of any other person or party
(including, without limitation, Tenant) relating to this Guaranty or the
obligations of Guarantor hereunder or otherwise with respect to the Lease. The
Guaranty sets forth the entire agreement and understanding of Landlord and
Guarantor, and Guarantor absolutely, unconditionally and irrevocably waives any
and all right to assert any defense, set-off, counterclaim or cross-claim of
any nature whatsoever with respect to this Guaranty or the obligations of
Guarantor under this Guaranty or the obligations of any other person or party
(including, without limitation, Tenant) relating to this Guaranty or the
obligations of Guarantor under the Guaranty or otherwise with respect to the
Lease in any action or proceeding brought by Landlord with respect to the Lease
or the obligations of Guarantor under this Guaranty. Guarantor acknowledges
that no oral or other agreements, understandings, representations or warranties
exist with respect to this Guaranty or with respect to the obligations of
Guarantor under this Guaranty except as specifically set forth in this
Guaranty.


 


3.                                       If the Lease shall be renewed, or its term
extended or


 


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held over by Tenant for any period beyond the date specified in the
Lease for the expiration of said term, of if additional space shall be included
in, or substituted for all or any part of, the Premises demised by the Lease,
or if the Lease be modified by agreement between Landlord and Tenant in any
other similar or dissimilar respect, the obligations hereunder of Guarantor
shall extend and apply with respect to the full and faithful keeping,
performance and observance of all of the covenants, agreements, terms,
provisions and conditions which under such renewal of the Lease or extension of
its term and/or with respect to any such additional space, or which under any
supplemental indenture or new lease or modifications agreement, entered into
for the purpose of expressing or confirming any such renewal, extension,
inclusion, substitution or modification, are to be kept, performed and observed
by Tenant (expressly including, without being limited to, the payment as and
when due of Fixed Rent, additional rent, charges and damages provided for
thereunder) and the payment of any and all other damages for which Tenant shall
be liable by reason of any act or omission contrary to any of said covenants,
agreements, terms, provisions or conditions. Notwithstanding the foregoing, in
the event Landlord and Tenant enter into an agreement
whereby Tenant leases additional
space in the Building or the term of the Lease is renewed or extended or the
Fixed Rent is increased (such lease of additional space, renewal or extension
not pursuant to the terms of any options or rights contained in the Lease),
Guarantor’s obligations hereunder shall extend and apply to such lease of additional
space, renewal or extension or increase in Fixed Rent only if Guarantor has
consented to such lease of additional space, renewal or extension or increase
in Fixed Rent (provided Guarantor’s obligations hereunder shall remain
unimpaired with respect to the Lease without regard to the lease of additional
space, renewal or extension or increase in Fixed Rent).


 


4.                             Neither the giving nor the withholding by
Landlord of any consent or approval provided for in the Lease shall affect in
any way the obligations hereunder of Guarantor.


 


5.                             The undersigned waives and releases any claim
(within the meaning of 11 U.S.C. § 101) which it may have against Tenant
arising from a payment made by the undersigned under this Guaranty and agrees
not to assert or take advantage of any subrogation rights to proceed against
Tenant for reimbursement. It is expressly understood that the waivers and
agreements of the undersigned set forth above constitute additional and
cumulative benefits given to Landlord for its security and as an inducement for
its entering into the Lease with Tenant. Neither Guarantor’s obligation to make
payment in accordance with the terms of this Guaranty nor any remedy for the
enforcement thereof shall be impaired, modified, changed, stayed, released or limited
in any


 


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manner whatsoever by any impairment, modification, change, release,
limitation or stay of the liability of Tenant or its estate in bankruptcy or
any remedy for the enforcement thereof, resulting from the operation of any
present or future provision of the Bankruptcy Code of the United States or
other statute or from the decision of any court interpreting any of the same,
and Guarantor shall be obligated under this Guaranty as if no such impairment,
stay, modification, change, release or limitation had occurred. This Guaranty
shall continue to be effective or shall be reinstated (as the case may be) if
at any time payment of all or any part of any sum payable pursuant to the Lease
is rescinded or otherwise required to be returned by Landlord upon the
insolvency, bankruptcy, or reorganization of Tenant, all as though such payment
to Landlord had not been made, regardless of whether Landlord contested the
order requiring the return of such payment.


 


6.                                       Until all the covenants and conditions in the
Lease on the Tenant’s part to be performed and observed are fully performed and
observed, the Guarantor: (a) shall have no right of subrogation against
the Tenant by reason of any payments or acts of performance by the Guarantor,
in compliance with the obligations of the Guarantor hereunder; (b) waives
any right to enforce any remedy which the Guarantor now or hereafter shall have
against the Tenant by reason of any one or more payment or acts of performance
in compliance with the obligations of the Guarantor hereunder; and
(c) subordinates any liability or indebtedness of the Tenant now or
hereafter held by the Guarantor to the obligations of the Tenant to the
Landlord under the Lease. Nothing contained in this Guaranty shall prevent
Tenant from making payments to Guarantor in the ordinary course of business so
long as Tenant is not in default under any of its obligations under this Lease.


 


7.                                       This Guaranty, and all of the terms hereof,
shall be binding on Guarantor and the successors, assigns, and legal representatives of Guarantor.


 


8.                                       Guarantor hereby waives the right to trial by
jury in any action or proceeding that may hereafter be instituted by Landlord
against Guarantor in respect of this Guaranty.


 


9.                                       All of Landlord’s rights and remedies under
the Lease or under this Guaranty are intended to be distinct, separate and
cumulative, and no such right or remedy therein or herein mentioned is intended
to be in exclusion of or a waiver of any of the others.


 


10.                                 This Guaranty shall be deemed to have been
made in the State of New York, Guarantor consents to the jurisdiction of the
courts of the State of New York, and the rights and liabilities of Landlord and
Guarantor shall be determined in accordance with


 


4

















 


the laws of the State of New York. Guarantor agrees that it will be conclusively
bound by the judgment in any action by Landlord against Tenant (wherever
brought) as if Guarantor were a party to such action, even though Guarantor is
not joined as a party in such action. In addition, if Guarantor cannot be
effectively served with process pursuant to the laws of the State of New York
because Guarantor does not have sufficient contacts with New York or for any
other reason, then Guarantor agrees that effective service of process upon
Tenant shall constitute effective service of process upon Guarantor as well.


 


11.                                 Guarantor will pay to Landlord all Landlord’s
expenses, including, but not limited to, reasonable attorneys’ fees and
expenses, in enforcing this Guaranty.


 


12.                                 This Guaranty shall survive the termination
of the Lease.


 


Date:                    September 8, 2008


 


 


	
   

  	
  HALLMARK CARDS, INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E. Gardner

  
	
   

  	
   

  	
  Name: 
  Brian E. Gardner

  
	
   

  	
   

  	
  Title:   Executive Vice President

  
				



 


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  State of Missouri

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  County
  of Jackson

  	
  )

  	
   

  



 


On the 8th day of September in the
year 2008 before me, the undersigned, Notary Public in and for said State,
personally appeared Brian E. Gardner personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.


 


 


	
   

  	
  /s/ Becky J. Long

  
	
   

  	
  Notary public

  
	
   

  	
   

  
	
  SEAL

  	
  Becky J. Long - Notary
  Public

  
	
   

  	
  Notary Seal, State of

  
	
   

  	
  Missouri - Bates County

  
	
   

  	
  Commission #05694823

  
	
   

  	
  My Commission Expires 4/12/2009

  



 


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