**EXHIBIT 10.98**

 

**WAIVERAND STANDBY PURCHASE AGREEMENT**

 

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

 

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

 

WHEREAS, the Hallmark Lenders are willing todefer certain payments due under the Subject Obligations and to agree topurchase from the Bank Lenders (as defined below) certain obligations of theBorrowers, on the terms and subject to the conditions set forth in thisAgreement;

 

WHEREAS, the Borrowers are willing to modifythe Subject Obligations on the terms and subject to the conditions set forth inthis Agreement;

 

NOW, THEREFORE, in consideration for theforegoing premises and the mutual covenants and agreements contained herein,and for other good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, the parties hereto, intending to be legallybound, agree as follows:

 

**1.****                                      Definitionsand Rules of Construction.**

 

**(a)****                                  Definitions**.As used herein:

 

“*Agreement*” hasthe meaning set forth in the introductory paragraph.

 

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

 

“*Borrowers*” hasthe meaning set forth in the introductory paragraph.

 

*“Business Day”* shallmean any day other than a Saturday or Sunday, or a day on which banking institutionsin the State of New York or the State of California are authorized or obligatedby law or executive order to remain closed.

 

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

 

“*CreditFacility*” means the Credit, Security, Guaranty and Pledge Agreementdated 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,

 

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August 4, 2003, October 28, 2004, March 1,2005 and March 21, 2006, among Crown Media Holdings, Inc., theguarantors named therein, the Hallmark Lenders referred to therein and JPMorganChase Bank, N.A. (formerly known as JPMorgan Chase Bank), as administrativeagent.

 

“*CrownHoldings*” 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.

 

“*HallmarkLenders*” 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 accountingprinciples would be included in determining total liabilities as shown on theliability side of a balance sheet as at the date as of which debt is to bedetermined, or to which reference should be made by footnotes thereto, but (a) alsoincludes reimbursement obligations, guaranties, endorsements (other thanendorsements for collection or deposit in the ordinary course of business), andother contingent obligations in respect of, or to purchase or otherwise acquireor advance funds on account of or otherwise service, obligations of others; and(b) excludes any amounts payable to employees or directors of theBorrowers in regard to restricted stock units.

 

“*Library Transaction Payable*” hasthe meaning set forth in Exhibit A.

 

“*LoanDocuments*” include this Agreement, the Notes, from and after thedate as of which Hallmark is deemed to have purchased a participation in the “Obligations”under the Credit Facility or purchases the Indebtedness under the CreditFacility pursuant to Section 3, the Credit Facility, and any and all otherwritings which now or hereafter evidence or secure any portion of the SubjectObligations, and any amendments, modifications or substitutions of or for theforegoing.

 

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

 

“*ParticipatedObligation*” has the meaning set forth in Exhibit A.

 

“*ReleasedMatters*” has the meaning set forth in Section 8.

 

“*ReleasedParties*” has the meaning set forth in Section 8.

 

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

 

“*StandbyPurchaser*” has the meaning set forth in Section 3.

 

“*SubjectObligations*” 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 meaningset forth in Exhibit A.

 

“*2006 Note*” has the meaningset forth in Section 7(b).

 

*“WaiverPeriod”* has the meaning set forth in Section 2(a).

 

“*WaiverTermination Date*” has the meaning set forth in Section 2(c)

 

**(b)****                                  AgreementControlling**. In the event of any inconsistency between the terms of thisAgreement and the Subject Obligations or any other Loan Documents, thisAgreement shall govern. Each Borrower acknowledges that it has consulted withcounsel and with such other experts and advisors as it has deemed necessary inconnection with the negotiation, execution and delivery of this Agreement. ThisAgreement shall be construed without regard to any presumption or rule requiringthat it be construed against the party causing this Agreement or any part hereofto be drafted.

 

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

 

**2.****                                      Agreementto Waive.**

 

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

 

(i)                                     Exceptas set forth in clause (b)(i) below and Section 6, all payments duefrom Borrower with respect to the Subject Obligations during the period (the “*Waiver Period*”) commencing on the datehereof and ending on the Waiver Termination Date, shall be deferred to theWaiver Termination Date, whereupon such amounts shall become immediately dueand payable;

 

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

 

(1)                                  acceleratethe maturity of the Subject Obligations or initiate proceedings for thecollection of the Subject Obligations or foreclose with respect to thecollateral security therefor; and

 

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

 

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initiate or participate in similar insolvencyreorganization, or moratorium proceedings for the benefit of creditors of theBorrowers or any of them.

 

**(b)****                                  PermittedActions.**Notwithstanding paragraph (a) of this Section 2, duringthe Waiver Period:

 

(i)                                               theBorrowers shall pay, and Hallmark shall be entitled to collect, accruedinterest in respect of the Participated Obligation in accordance with the termsthereof (to the extent not prohibited by the Credit Facility), which from andafter the maturity of the Participated Obligation through the WaiverTermination Date shall accrue at the non-default rate;

 

(ii)                                            intereston the Subject Obligations shall continue to accrue in accordance with theterms and conditions of the Subject Obligations (as the same are modified, amendedand restated in accordance with this Agreement); provided that with respect tothe 2005 Note, interest shall continue to accrue from and after the MaturityDate (as defined therein) at the rate set forth therein;

 

(iii)                                         theHallmark Lenders may take such action as not prohibited by the terms ofthe Subject Obligations to further protect or perfect any lien on collateralsecuring the Subject Obligations; and

 

(iv)                                        nothingin this Agreement shall limit any right any of the Hallmark Lenders may haveto offset against the Subject Obligations, amounts that it owes any Borrower pursuantto 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 asotherwise agreed by Crown Holdings.

 

**(c)****                                  WaiverTermination Date**. This Waiver shall terminate automatically on May 31,2007, unless terminated earlier as set forth herein and such date of actualtermination shall be the “*Waiver TerminationDate*”. Hallmark Lenders shall have the right to terminate thisWaiver upon written notice upon the occurrence of any of the following inclauses (i) through (iv). The Waiver shall automatically terminate uponthe occurrence of either of (v) or (vi):

 

(i)                                               AnyBorrower shall fail to pay any principal or interest, regardless of amount, duein respect of any Indebtedness, when and as the same shall become due andpayable (and after the expiration of any cure periods), (other thanIndebtedness under the Subject Obligations, including the Credit Facility) withan aggregate principal amount in excess of $5 million, or any other event orcondition occurs that results in any such Indebtedness becoming due prior toits scheduled maturity provided, however, that the Waiver will not terminate ifthe Borrower reduces the principal amount of such aggregate Indebtedness to $5million or less within five Business Days of the Lender’s written notice oftermination;

 

(ii)                                            CMUSshall default in the payment of licensing fees pursuant to that certain SecondAmended and Restated Program License Agreement dated as

 

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

 

(iii)                                         therepresentation and warranty of any Borrower contained herein shall have beenfalse or misleading in any material respect;

 

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

 

(v)                                           Aninvoluntary proceeding shall be commenced or an involuntary petition shall befiled in a court of competent jurisdiction seeking (1) relief in respectof any Borrower or any subsidiary of any Borrower, or of a substantial part ofthe property or assets of any Borrower or any subsidiary of any Borrower, underTitle 11 of the United States Code, as now constituted or hereafter amended, orany other Federal, state or foreign bankruptcy, insolvency, receivership orsimilar law, (2) the appointment of a receiver, trustee, custodian,sequestrator, conservator or similar official for any Borrower or anysubsidiary of any Borrower or for a substantial part of the property orassets of any Borrower or any subsidiary of any Borrower or (3) thewinding-up or liquidation of any Borrower or any subsidiary of any Borrower;and

 

(vi)                                        anyBorrower or any subsidiary of any Borrower shall (1) voluntarily commenceany proceeding or file any petition seeking relief under Title 11 of the UnitedStates Code, as now constituted or hereafter amended, or any other Federal,state or foreign bankruptcy, insolvency, receivership or similar law, (2) consentto 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) applyfor or consent to the appointment of a receiver, trustee, custodian,sequestrator, conservator or similar official for any Borrower or anysubsidiary of any Borrower or for a substantial part of the property orassets of any Borrower or any subsidiary of any Borrower, (4) file ananswer admitting the material allegations of a petition filed against it in anysuch 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.****                                      StandbyPurchase Obligation.**If the Bank Lenders accelerate any of the Indebtednessof Crown Holdings under the Credit Facility, or seek to collect anyIndebtedness under, or exercise any remedies pursuant to the Credit Facility,then Crown Holdings may elect to provide prompt written notice of suchaction to Hallmark exercising its rights under this Section 3. Withinthree (3) Business Days’ of receipt of a notice pursuant to the precedingsentence, Hallmark or its designated subsidiary (the “*StandbyPurchaser*”) shall exercise its option to purchase all of theoutstanding Indebtedness under the Credit Facility, together with all otherinterests of the Bank Lenders thereunder pursuant to that certain Amendment No. 9to the Credit Facility, dated as of March 21, 2006, among the Borrowers,Hallmark and the Bank Lenders. Any Indebtedness so acquired shall be deemed tobe Participated Obligations for

 

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purposes of this Agreement. Allexpenses and fees in connection with this purchase by the Standby Purchasershall be added to the principal amount of the Participated Obligations.

 

**4.****                                      Representations and Warranties**. EachBorrower hereby jointly and severally represents and warrants to each HallmarkLender as follows:

 

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

 

**(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) applicablebankruptcy, insolvency, reorganization, moratorium and other laws affecting theenforcement of creditors’ rights generally, and (ii) general principles ofequity, regardless of whether such enforcement is considered in a proceeding inequity or at law.

 

**(c)****                                  NoViolation**. The execution, delivery and performance of this Agreement by theBorrowers does not and will not:  (i) violateany 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’scertificate of incorporation and bylaws if such Borrower is a corporation orother comparable organizational document if such Borrower is not a corporation;(iii) conflict with, result in a material breach or default of, or otherwiseaccelerate the performance required under any material agreement or instrumentto 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 orlien on any material property of any such Borrower, whether now owned orhereafter acquired.

 

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

 

**(e)****                                 ****Acknowledgement of Indebtedness**.

 

(i)                                               Eachof Crown Holdings and CMUS acknowledges that it is validly indebted to HCCpursuant to the 2001 Note, and that the outstanding principal amount of the2001 Note is $81,067,290.49, as calculated on January 1, 2005, and theaccrued but unpaid interest for the period January 1, 2005 through February 28,2006 is $6,200,297.91.

 

(ii)                                            CrownHoldings 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

 

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

 

(iii)                                         CrownHoldings acknowledges that as of March 1, 2006 it is validly indebted toHEHI pursuant to the Library Transaction Payable, and that the outstandingamount of the Library Transaction Payable is $70,414,087.87.

 

(iv)                                        CMUSacknowledges that as of March 1, 2006 it is validly indebted to HEHIpursuant to the 2005 Note, and that the outstanding principal amount of the2005 Note is $132,785,424.00 and the accrued but unpaid interest is$4,043,284.00.

 

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

 

**6.****                                      Covenantsof Borrowers.**

 

**(a)****                                  Compliance with Loan Documents**. TheBorrowers shall comply with the covenants and obligations of the Borrowersunder the Loan Documents.

 

**(b)****                                  Further Assurance**. The Borrowersshall execute such other and further documents and instruments as each HallmarkLender may request to implement the provisions of this Agreement.

 

**(c)****                                  Refinancing: **Borrower shall use its commercially reasonable efforts torefinance the Subject Obligations as soon as reasonably practicable after thedate hereof.

 

**(d)****                                  Prepaymentof Subject Obligations from Excess Cash Flow.**

 

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

 

(1)                                  prorata to accrued but unpaid interest on the 2001 Note, the 2005 Note, and the2006 Note, then

 

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

 

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

 

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

 

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

 

(6)                                  tothe Participated Obligations.

 

(ii)                                            “*Excess Cash Flow*” shall mean (withoutduplication):

 

(1)                                  thenet cash proceeds from the issuance of any equity, securities or debtinstruments by any of the Borrowers;

 

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

 

(3)                                  ifpositive, the consolidated net cash flow from operations of Crown Holdings forany calendar quarter within the Waiver Period as set forth in any earningspress release filed on Form 8-K, on any quarterly report on Form 10-Qor annual report on Form 10-K, less cash funds used to pay currentoperating expenses and to pay or establish reasonable reserves for futureexpenses, Indebtedness payments, and capital improvements and replacements, asdetermined the Board of Directors.

 

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

 

**(a)****                                  Authorization**. The HallmarkLenders shall have received a certified copy of all action taken by theBorrowers to authorize the execution, delivery, and performance of thisAgreement and the other Loan Documents (including the consent of a majority ofthe members of Crown Holding’s Board of Directors that have not been nominatedby Hallmark or any of its subsidiaries (other than the Borrower and theirsubsidiaries)), and such other authorization documents as the Hallmark Lendersshall reasonably require.

 

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

 

**8.****                                      Releaseof Claims and Waiver.**Each Borrower hereby releases, remits, acquits andforever discharges each Hallmark Lender and each Hallmark Lender’s employees,agents, representatives, consultants, attorneys, fiduciaries, servants,officers, directors, partners, predecessors, successors and assigns, subsidiarycorporations, parent corporations, and related corporate divisions (all of theforegoing 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 anyand every character, known or unknown, direct and/or indirect, at law or inequity, of whatsoever kind or nature, whether heretofore or hereafter arising,for or because of any manner or things done, which were omitted or suffered tobe done by any of the Released Parties prior to and including the date ofexecution hereof, and which also

 

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in any way directly orindirectly 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 Borrowersunder this Agreement, the Subject Obligations and/or any other Loan Documentheretofore executed, including claims relating to ‘lender liability’ (all ofthe foregoing hereinafter called the “*Released Matters*”).The Borrowers acknowledge that the Hallmark Lenders’ agreement to waivecontained in Section 2 of this Agreement and Hallmark’s agreement to purchasethe outstanding Indebtedness and the Bank Lenders’ other interests under theCredit Facility contained in Section 3 of this Agreement are intended tobe in full satisfaction of all or any alleged injuries or damages arising inconnection with the Released Matters. Each Borrower represents and warrants toeach Hallmark Lender that it has not purported to transfer, assign or otherwiseconvey any right, title or interest of such Borrower in any Released Matter toany other Person and that the foregoing constitutes a full and complete releaseof all Released Matters.

 

**9.****                                      Miscellaneous.**

 

**(a)****                                  NoWaiver By Hallmark Lenders.**Notwithstanding any course of dealing betweenthe parties, neither failure nor delay on the part of any Hallmark Lenderto exercise any right, power, or privilege hereunder shall operate as a waiverthereof, nor shall any single or partial exercise of any right, power, orprivilege hereunder preclude any other or further exercise thereof or theexercise of any other right, power, or privilege. No notice to or demand uponthe Borrowers shall be deemed to be a waiver of the obligation of the Borrowersor of the right of any Hallmark Lender to take further action without notice ordemand. The agreement to forebear by the Hallmark Lenders contained in thisAgreement 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**. ThisAgreement shall be binding upon and inure to the benefit of and be enforceableby the parties hereto, their respective successors and assigns. No other personor 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 entireagreement and understanding among the parties relating to the subject matterhereof, and supersede all prior proposals, negotiations, agreements andunderstandings relating to such subject matter. In entering into thisAgreement, the Borrowers acknowledges they are relying on no statement,representation, warranty, covenant or agreement of any kind made by anyHallmark Lender or any employee or agent of the Hallmark Lenders, except forthe agreements of the Hallmark Lenders set forth herein.

 

**(d)****                                  Severability**. If any provision ofthis Agreement shall be held invalid or unenforceable in whole or in part inany jurisdiction, such provision shall, as to such jurisdiction, be ineffectiveto the extent of such invalidity or enforceability without in any manneraffecting the validity or enforceability of such provision in any otherjurisdiction 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

 

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shall be addedas a part of this Agreement a provision as similar in terms to such invalidor unenforceable provision as may be possible and be valid andenforceable.

 

**(e)****                                  Governing Law**. This Agreementshall be governed by and construed in accordance with the internal substantivelaws of the State of New York, without regard to the choice of law principlesof such State.

 

**(f)****                                    Counterparts; Faxed Signatures**. ThisAgreement may be executed in any number of counterparts and by differentparties to this Agreement on separate counterparts, each of which, when soexecuted, shall be deemed an original, but all such counterparts shallconstitute one and the same agreement. Any signature delivered by a party byfacsimile transmission shall be deemed to be an original signature hereto.

 

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

 

If to theBorrowers:

 

Crown MediaHoldings, Inc.

12700 VenturaBlvd

Studio City,CA  91302

Attn:                    CharlesStanford, Esq.

Fax:                           818-755-2469

 

If to theHallmark Lenders or the Standby Purchaser:

 

c/o HallmarkCards Incorporated

2501 McGeeTrafficway

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 theBorrowers contained herein shall survive the termination of the Waiver Periodand payment in full of the obligations of the Borrowers under the SubjectObligations.

 

**(i)****                                    Amendment**. No amendment, modification,rescission, waiver or release of any provision of this Agreement shall beeffective 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) CONSENTTO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF NEWYORK; (B) AGREE THAT VENUE SHALL BE PROPER IN ANY COURT OF COMPETENTJURISDICTION LOCATED IN THE STATE OF NEW YORK; AND (C) WAIVE THEIR RIGHTTO TRIAL BY JURY IN ANY CONTROVERSY ARISING OUT OF OR RELATING TO ANY LOANDOCUMENT(S).

 

[Remainder of page intentionallyleft blank.]

 

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IN WITNESS WHEREOF, the parties hereto haveexecuted 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**

 

**SUBJECTOBLIGATIONS**

 

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

 

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

 

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

 

4.                                       The PromissoryNote, dated as of October 1, 2005, of CMUS, in the original principalamount of $132,785,424, originally payable to Hallmark EntertainmentDistribution, 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 Hallmarkunder the Credit Facility, by virtue of Hallmark’s deemed purchase of aparticipation in the Obligations pursuant to Section 14.1 of Amendment No. 8to the Credit Facility or pursuant to Section 13.3 (l) of Amendment No. 9to the Credit Facility (the “*ParticipatedObligation*”).

 

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