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                                                                    EXHIBIT 10.4


             FORM OF LIMITED GUARANTEE AGREEMENT AND ACKNOWLEDGEMENT


         LIMITED GUARANTEE AGREEMENT AND ACKNOWLEDGEMENT, dated as of August 31,
2001(this "Agreement") made by HALLMARK CARDS, INCORPORATED (the "Guarantor"),
in favor of THE CHASE MANHATTAN BANK, as Agent on behalf of the Lenders and the
Issuing Bank referred to below (the "Agent"). Reference is made to the Credit,
Security, Guaranty and Pledge Agreement dated as of August 31, 2001 (as the same
may be amended, supplemented or otherwise modified, renewed, replaced or
extended from time to time, the "Credit Agreement"), by and among CROWN MEDIA
HOLDINGS, INC. ("Crown Media"), its subsidiaries which are parties thereto from
time to time, the lenders which are parties thereto from time to time (such
persons and their successors and assigns being hereinafter referred to as the
"Lenders") and THE CHASE MANHATTAN BANK, as Agent and Issuing Bank. Capitalized
terms used herein but not otherwise defined have the meanings given to them in
the Credit Agreement.

                                   WITNESSETH:

         WHEREAS, Guarantor is, directly or indirectly, the owner of all the
membership interests of Hallmark Entertainment Distribution, LLC ("Seller");

         WHEREAS, Seller and Crown Media have entered into a Purchase and Sale
Agreement dated as of April 10, 2001 (such agreement as amended through the date
hereof being hereinafter referred to as the "Purchase Agreement") pursuant to
which the Seller is selling to Crown Media various rights relating to a library
of 702 titles (the "Library");

         WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans and to participate in Letters of Credit issued by the
Issuing Bank, in each case upon the terms and subject to the conditions set
forth therein;

         WHEREAS, up to $120,000,000 of the loans made pursuant to the Credit
Agreement will be used by Crown Media to pay the cash portion of the Purchase
Price under the Purchase Agreement;

         WHEREAS, HC Crown Corporation ("HC Crown") is a wholly owned subsidiary
of the Guarantor and the Guarantor indirectly owns approximately 51.6% of the
outstanding shares of common stock of Crown Media and will after the
consummation of the sale contemplated by the Purchase Agreement indirectly own
between approximately 66.7% and 67.7% of such shares.

         WHEREAS, the Guarantor has entered into or will simultaneously with the
execution hereof be entering into a Subordination and Support Agreement (as
amended from time to time, the "Subordination Agreement") with Crown Media, the
subsidiaries of Crown Media which are parties to the Credit Agreement and the
Agent, pursuant to which the Guarantor has, among other things, agreed to cause
HC Crown to make certain advances to Crown Media pursuant to the terms of a
Promissory Note dated as of August 31, 2001 in the amount of $150 million

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executed by each of Crown Media, HC Crown, Crown Media International, Inc. and
Crown Media United States, LLC (the HC/Crown Media Loan Agreement);

         WHEREAS, in order to induce the Lenders to enter into the Credit
Agreement, Hallmark Entertainment Inc. ("HEI") has entered into or will
simultaneously with the execution thereof be entering into a Hallmark Inducement
Agreement (the "Inducement Agreement") with the Agent, pursuant to which HEI
has, among other things, agreed to indemnify the Agent (for the benefit of the
Lenders) for any defects in the chain of title of any films which make up part
of the Library;

         WHEREAS, the Guarantor will derive substantial benefit from the making
of the Loans and issuance of the Letters of Credit;

         WHEREAS, it is a condition precedent to the obligations of the Lenders
to make the Loans and participate in the Letters of Credit that the Guarantor
shall have executed and delivered the Subordination Agreement and this Agreement
to the Agent.

NOW, THEREFORE, in consideration of the premises and to induce (i) the Agent,
the Issuing Bank and the Lenders to enter into the Credit Agreement, (ii) the
Issuing Bank to issue Letters of Credit, and (iii) the Lenders to make their
respective Loans and to participate in the Letters of Credit, the Guarantor
hereby agrees with the Agent, for the benefit of itself, the Issuing Bank and
the Lenders, as follows:

SECTION 1. ACKNOWLEDGEMENT.

         1.01 BACKUP OBLIGATIONS. To avoid any doubt as to the enforceability of
the HC/Crown Media Loan Agreement and to support the performance of HC Crown
thereunder, the Guarantor is executing this Agreement to reflect its obligation
to the Agent (for the benefit of itself, the Issuing Bank and the Lenders), to
make advances under this Agreement to the extent not made under the HC/Crown
Media Loan Agreement.

         1.02 MAXIMUM LIABILITY OF GUARANTOR UNDER THIS LIMITED GUARANTEE. The
maximum liability of the Guarantor under the terms of this Agreement shall be
the amount by which $150 million exceeds the sum of (a) aggregate principal
amount (but not accrued and unpaid interest or any claims for expenses or other
amounts other than principal advances) outstanding under the HC/Crown Media Loan
Agreement at the time that written demand for payment is made hereunder by the
Agent on the Guarantor for payment plus (b) the Net Cash Proceeds theretofore
used to make Restricted Payments permitted pursuant to Section 6.5(vii) of the
Credit Agreement (the "Maximum Liability"). For the avoidance of doubt, Net Cash
Proceeds used to reduce the commitment to make loans under the HCC Promissory
Note shall be considered "Restricted Payments" for purposes of the preceding
sentence.

         1.03 NATURE OF ADVANCES SUBSEQUENT TO COMMENCEMENT OF A PROCEEDING. The
parties hereto acknowledge that the Guarantor may (whether before or subsequent
to the commencement of a proceeding under the Bankruptcy Code with regard to
Crown Media), satisfy its obligations hereunder by having HC Crown make loans to
Crown Media pursuant to the HC/Crown Media Loan Agreement. Any such loans
whether made prior or subsequent to the commencement of a proceeding against or
by Crown Media under the Bankruptcy Code shall as


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between the Guarantor, the Agent, the Issuing Bank and the Lenders, be subject
to the subordination terms contained in the Subordination Agreement.

SECTION 2. GUARANTEE.

         2.01 AGREEMENT TO PAY THE OBLIGATIONS. The Guarantor irrevocably and
unconditionally guarantees to the Agent (for the benefit of itself, the Issuing
Bank and the Lenders) the due and punctual payment of, and performance of, all
of the Obligations of Crown Media under the Credit Agreement, as and when the
same shall become due, whether at stated maturity, by acceleration or otherwise,
including interest accruing on and after the filing of any petition in
bankruptcy or of reorganization of Crown Media or any of its subsidiaries
whether or not post-filing interest is allowed in such proceeding; provided,
however, that (i) the maximum aggregate amount of the liability of the Guarantor
hereunder shall be the Maximum Liability computed pursuant to Section 1.02
hereof and (ii) the Maximum Liability shall be reduced on a Dollar for Dollar
basis by the principal amount of any loans made by HC Crown to Crown Media under
the terms of the written HC/Crown Media Loan Agreement subsequent to the date of
written demand for payment hereunder, but only to the extent such loans are not
directly or indirectly repaid by Crown Media or any of its subsidiaries. Such
maximum guaranteed amount in effect from time to time is referred to as the
"Guaranteed Amount."

         2.02 WAIVERS. The Guarantor waives presentation to, demand for payment
from and protest to, as the case may be, Crown Media, or any other guarantor of
any of the Obligations, and also waives notice of protest for nonpayment, notice
of acceleration and notice of intent to accelerate. The obligations of the
Guarantor hereunder shall not be affected by (a) the failure of the Agent, the
Issuing Bank or any Lender to assert any claim or demand or to enforce any right
or remedy against Crown Media, or any other guarantor of any of the Obligations
or otherwise; (b) any extension or renewal of any provision hereof or of the
Credit Agreement; (c) the failure of the Agent, the Issuing Bank or the Lenders
to obtain the consent of the Guarantor with respect to any rescission, waiver,
compromise, acceleration, amendment or modification of any of the terms or
provisions of the Credit Agreement and/or the HC/Crown Loan Agreement; (d) the
release, exchange, waiver or foreclosure of any security held by the Agent for
the Obligations or any of them, or otherwise; or (e) the release or substitution
of any other guarantor of the Obligations.

         2.03 GUARANTEE OF PERFORMANCE AND OF PAYMENT. The Guarantor further
agrees that this guarantee constitutes a guarantee of performance and of payment
when due and not just of collection, and waives any right to require that any
resort be had by the Agent, the Issuing Bank or any Lender to any security held
for payment of the Obligations or to any balance of any deposit, account or
credit on the books of the Agent, the Issuing Bank or any Lender in favor of
Crown Media or any other Person.

         2.04 DUTY TO KEEP INFORMED. The Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Crown Media,
and any other guarantors of the Obligations and any circumstances affecting the
Collateral, or the ability of Crown Media to perform under the Credit Agreement.


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         2.05 LIABILITY ABSOLUTE. The Guarantor's obligations hereunder shall
not be affected by the genuineness, validity, regularity or enforceability of
the Obligations, the Notes or any other instrument evidencing any Obligations,
or by the existence, validity, enforceability, perfection, or extent of any
collateral therefor or by any other circumstance relating to the Obligations
which might otherwise constitute a defense hereto other than indefeasible
repayment in full of the Obligations. The Agent, the Issuing Bank and the
Lenders make no representation or warranty with respect to any such
circumstances and have no duty or responsibility whatsoever to the Guarantor in
respect to the management and maintenance of the Obligations or any collateral
for the Obligations.

         2.06 NO IMPAIRMENT OF AGREEMENT, ETC. The obligations of the Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason (except payment and performance in full of the
Obligations), including, without limitation, any claim of unenforceability of
the Subordination Agreement and/or the HC/Crown Media Loan Agreement, waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
the Guarantor hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Agent, the Issuing Bank or any Lender to assert
any claim or demand or to enforce any remedy under this Agreement or any other
agreement, by any waiver or modification of any provision hereof or thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
the Guarantor or would otherwise operate as a discharge of the Guarantor as a
matter of law, unless and until the Obligations are indefeasibly paid in full,
the Commitments have terminated and each outstanding Letter of Credit has
expired or otherwise been terminated.

         2.07 CONTINUATION AND REINSTATEMENT; SUBROGATION.

                  (a) The Guarantor further agrees that its guarantee hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by the Agent, the Issuing Bank or the Lenders upon the
bankruptcy or reorganization of Crown Media or otherwise.

                  (b) All rights of the Guarantor against Crown Media arising as
a result of the payment by the Guarantor of any sums hereunder by way of right
of subrogation or otherwise, shall in all respects be subordinated and junior in
right of payment to, and shall not be exercised by the Guarantor until and
unless the prior final and indefeasible payment in full of all the Obligations.
If any amount shall be paid to the Guarantor for the account of Crown Media,
such amount shall be held in trust for the benefit of the Agent, the Issuing
Bank and the Lenders segregated from the Guarantor's own assets, and shall
forthwith be paid to the Agent on behalf of itself, the Issuing Bank and the
Lenders to be credited and applied to the Obligations, whether matured or
unmatured.

         2.08 SEPARATE ACTION. The obligations of the Guarantor hereunder are
independent of the obligations of Crown Media, and any other guarantor of the
Obligations, and a separate


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action or actions may be brought and prosecuted against the Guarantor whether or
not any action is brought against Crown Media or any of such other guarantors
and whether or not such Persons are joined in any such action or actions.

         2.09 BANKRUPTCY, ETC.

                  (a) So long as any Obligations remain outstanding, the
Guarantor shall not, without the prior written consent of the Agent, commence or
join with any other Person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Crown Media or any of its subsidiaries. The
obligations of the Guarantor hereunder shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Crown Media or any of its subsidiaries or by any
defense which such Person(s) may have by reason of any such bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement proceeding,
or by reason of any order, decree or decision of any court or administrative
body resulting from any such proceeding.

                  (b) The Guarantor acknowledges and agrees that any interest on
any portion of the Obligations which accrues after the commencement of any
proceeding referred to in paragraph (a) above (or, if interest on any portion of
the Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Obligations if said proceedings had not been commenced) shall be
included in the Obligations because it is the intention of the Guarantor that
the Obligations which are guaranteed by the Guarantor pursuant hereto should be
determined without regard to any rule of law or order which may relieve Crown
Media of any portion of such Obligations. The Guarantor will permit any trustee
in bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay the Agent, or allow the claim of the Agent in
respect of, any such interest accruing after the date on which such proceeding
is commenced.

         2.10 NOTICE OF EVENTS. As soon as the Guarantor obtains knowledge
thereof, the Guarantor shall give the Agent immediate written notice of any
condition or event which has resulted in a material adverse change in the
financial condition of the Guarantor, Crown Media or a breach of or
noncompliance with any term, condition or covenant contained herein, the Credit
Agreement, or any other document delivered pursuant hereto or thereto.

SECTION 3. REPRESENTATIONS AND WARRANTIES.

         In order to induce the Agent to accept this Agreement and to induce the
Agent, the Issuing Bank and the Lenders to enter into the Credit Agreement and
to make the Loans and to issue (and participate in) Letters of Credit
thereunder, the Guarantor hereby represents and warrants to the Agent that the
following statements are true and correct:

         3.01 ORGANIZATION; POWERS; AUTHORIZATION; ENFORCEABILITY.

                  (a) The Guarantor is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, has the
power and authority to carry on its business as now conducted and hereafter
proposed to be conducted and is duly qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.


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                  (b) The Guarantor has full power and authority to conduct its
business as now conducted and to execute, deliver and perform this Agreement.

                  (c) The Guarantor has taken all necessary corporate and legal
action to authorize this Agreement on the terms and conditions set forth herein
and to authorize the execution, delivery and performance hereof.

                  (d) This Agreement has been duly executed and delivered by the
Guarantor and constitutes the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the rights of creditors generally and subject to general
principles of equity (whether considered in a proceeding in equity or law).

         3.02 NO LEGAL BAR TO THIS AGREEMENT. The execution, delivery and
performance by the Guarantor of this Agreement, (a) do not require any consent
or approval of, registration or filing with, or any other action by, any
Governmental Authority or other Person, (b) do not and will not violate any
Applicable Law or the charter, by-laws or other organizational documents of the
Guarantor or any order of any Governmental Authority applicable to the Guarantor
or any of its properties or assets, (c) will not violate, be in conflict with,
or result in a breach of or constitute (with due notice or lapse of time) a
default under, or create any right to terminate, any material indenture, bond,
note or other agreement or instrument evidencing or governing any Indebtedness
or any other material agreement or instrument binding upon the Guarantor or its
assets, or give rise to a right thereunder to require any payment to be made by
the Guarantor and (d) will not result in the creation or imposition of any Lien
on any material asset of the Guarantor.

SECTION 4. MISCELLANEOUS.

         4.01 DEFAULT. The occurrence of any of the following events shall
constitute a default under this Agreement: (a) any representation or warranty
made by the Guarantor hereunder shall prove to have been false or misleading in
any material respect when made or delivered, or (b) the Guarantor shall fail to
perform of its obligations hereunder.

         4.02 SURVIVAL OF WARRANTIES. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement and the Credit Agreement and any increase in the Commitments under the
Credit Agreement.

         4.03 NOTICES. All notices and other communications shall be provided in
a manner authorized by Section 13.1 of the Credit Agreement to the relevant
party at its address set forth in such Section 13.1, or on the signature pages
hereto or to such other address as any party hereto may hereafter indicate in
writing.

         4.04 SEVERABILITY. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity, illegality or unenforceability of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.


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         4.05 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
waiver of any provision of this Agreement, and no consent to any departure by
the Guarantor therefrom, shall in any event be effective without the written
concurrence of the Agent and, in the case of any such amendment or modification,
the Guarantor. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.

         4.06 HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only, shall not constitute a part
of this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

         4.07 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE GUARANTOR HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS TO BE FULLY PERFORMED WITHIN THE STATE OF NEW YORK.

         4.08 SUCCESSORS AND ASSIGNS. The Agreement constitutes the continuing
obligation of the Guarantor and shall be binding upon the Guarantor and its
successors and assigns. The Agreement shall inure to the benefit of the Agent,
the Issuing Bank, the Lenders and their respective successors and assigns. The
Guarantor shall not assign this Agreement or any of the rights or obligations of
the Guarantor hereunder without the prior written consent of the Agent. The
terms and provisions of this Agreement shall inure to the benefit of any
transferee, assignee or participant of any Loan or Letter of Credit transferred,
assigned or conveyed in accordance with the provisions of the Credit Agreement,
and in the event of such transfer or assignment the rights and privileges herein
conferred upon the Agent shall automatically extend to and be vested in such
transferee, assignee or participant, all subject to the terms and conditions
hereof.

         4.09 AGENT. Written notice of resignation by, or removal of the Person
acting as the Agent pursuant to Article 12.11 of the Credit Agreement shall also
constitute resignation by, or removal of, such Person as the Agent under this
Agreement; and appointment of a successor Agent pursuant to Article 12.11 of the
Credit Agreement shall also constitute appointment of a successor Agent under
this Agreement. Upon acceptance of the appointment of a Person as a successor
Agent, that successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed Agent
under this Agreement, and the retiring or removed Agent under this Agreement
shall promptly (i) transfer to such successor Agent all sums held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Agent under this
Agreement, and (ii) take such other actions as may be necessary or appropriate
in connection with the assignment to such successor Agent of the rights created
hereunder, whereupon such retiring or removed Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Agent, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was Agent hereunder.


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         4.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

                  (a) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court for the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any Creditor Party may
otherwise have to bring any action or proceeding relating to this Agreement
against the Guarantor or its properties in the courts of any jurisdiction.

                  (b) The Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which the Guarantor may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
in any court referred to in paragraph (a) of this Section. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

                  (c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 4.03. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

         4.11 WAIVER OF JURY TRIAL.

         TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED,
THE GUARANTOR HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR
BASED UPON THIS AGREEMENT, THE SUBJECT MATTER HEREOF, THE CREDIT AGREEMENT OR
THE SUBJECT MATTER THEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. THE GUARANTOR ACKNOWLEDGES
THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THE PROVISIONS OF
THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH OTHER PARTIES HAVE
RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND OTHER
FUNDAMENTAL DOCUMENTS. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION 4.11 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
GUARANTOR TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.


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         4.12 WAIVER WITH RESPECT TO DAMAGES.

         THE GUARANTOR ACKNOWLEDGES THAT NONE OF THE AGENT, THE ISSUING BANK OR
ANY LENDER HAS ANY FIDUCIARY RELATIONSHIP WITH, OR FIDUCIARY DUTY TO, THE
GUARANTOR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
FUNDAMENTAL DOCUMENT. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR
SHALL NOT ASSERT, AND THE GUARANTOR HEREBY WAIVES, ANY CLAIMS AGAINST ANY
INDEMNITEE ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT, ANY OTHER FUNDAMENTAL
DOCUMENT, ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, ANY LOAN OR LETTER OF CREDIT OR THE
USE OF PROCEEDS THEREOF.

         4.13 FURTHER ASSURANCES. At any time or from time to time, upon the
request of the Agent, the Guarantor shall execute and deliver such further
documents and do such other acts and things as the Agent may reasonably request
in order to effect fully the purposes of this Agreement

         4.14 RIGHT OF SETOFF. If a default hereunder shall have occurred and be
continuing, and after such time as the Guarantor has been provided with notice
of such default, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Guarantor
against any of and all the Obligations now or hereafter existing under this
Agreement held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.

         4.15 COUNTERPARTS. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


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                  IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivery by its duly authorized officer as of
the day and year first above written.

                                        HALLMARK CARDS, INCORPORATED



                                        By: /s/ Robert J. Druten
                                            -------------------------------
                                            Name: Robert J. Druten
                                            Title:
                                            Address:
                                            Fax:

                                        THE CHASE MANHATTAN BANK,
                                        as Agent



                                        By: /s/ Garrett J. Verdone
                                            -------------------------------
                                            Name: Garret J. Verdone
                                            Title: Senior Vice President
                                            Address:
                                            Fax:


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