Document:

Exhibit 10.6

AMENDMENT 1 TO

WAIVER AND STANDBY PURCHASE AGREEMENT

This AMENDMENT 1, dated as of August 8, 2006,
amends that certain Waiver and Standby Purchase Agreement (the “Waiver Agreement”)
dated as of March 21, 2006, by and among Hallmark Cards, Incorporated, a
Missouri corporation (“Hallmark”),
HC Crown Corp., a Delaware corporation, Hallmark Entertainment Holdings, Inc.,
a Delaware corporation (“collectively, together with Hallmark the “Hallmark Lenders”)
and Crown Media Holdings, Inc., a Delaware corporation, Crown Media United
States, LLC, a Delaware limited liability company, and the subsidiaries of
Crown Holdings listed as Guarantors on the Credit Facility (collectively, the “Borrowers”).

WHEREAS, the Borrowers have requested that the
Hallmark Lenders extend the automatic Waiver Termination Date; and

WHEREAS, the Hallmark Lenders are willing to extend
the automatic Waiver Termination Date on the terms and subject to the
conditions set forth in this Amendment 1;

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.      Section 2(c).  Section 2(c) — Waiver Termination Date
shall be amended by replacing the first sentence with the following:

This Waiver shall terminate automatically on August 15, 2007, unless
terminated earlier as set forth herein and such date of actual termination
shall be the “Waiver Termination Date.”

2.      Representations and Warranties.  Each Borrower hereby jointly and severally
represents and warrants to each Hallmark Lender that after giving effect to
this Amendment 1 that all the representations and warranties contained in the
Waiver Agreement are true and correct as of the date hereof in all material
respects as if such representations and warranties had been made on and as of
the date hereof (except to the extent that any such representation or warranty
specifically relates to an earlier date.)

3.      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 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 the Waiver Agreement, the Hallmark Lenders’ agreement to extend the
automatic Waiver Termination Date pursuant to this Amendment 1, and Hallmark’s
agreement to purchase the outstanding Indebtedness and the Bank Lenders’ other
interests under the Credit Facility contained in Section 3 of the Waiver 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.

4.      Full Force and Effect.  Except to the extent amended herein, the Waiver
Agreement shall continue in full force and effect.

5.      Governing Law.  This Amendment 1 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.

6.      Counterparts; Faxed Signatures.  This Amendment 1 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.

IN WITNESS WHEREOF, the parties
hereto have executed this Amendment 1 as of the day and year first above
written.

	
  

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  CROWN MEDIA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles Stanford

  
	
   

  	
   

  	
  Name: Charles Stanford

  
	
   

  	
   

  	
  Title: EVP, General Counsel

  

 

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  CROWN MEDIA UNITED STATES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles Stanford

  
	
   

  	
   

  	
  Name: Charles Stanford

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  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: Vice President

  
	
   

  	
   

  
	
   

  	
  HALLMARK LENDERS:

  
	
   

  	
   

  
	
   

  	
  HALLMARK CARDS, INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E. Gardner

  
	
   

  	
   

  	
  Name: Brian E. Gardner

  
	
   

  	
   

  	
  Title: Executive Vice President

  
	
   

  	
   

  
	
   

  	
  HC CROWN CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E. Gardner

  
	
   

  	
   

  	
  Name: Brian E. Gardner

  
	
   

  	
   

  	
  Title: Vice President

  

 

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  HALLMARK ENTERTAINMENT HOLDINGS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E. Gardner

  
	
   

  	
   

  	
  Name: Brian E. Gardner

  
	
   

  	
   

  	
  Title: Vice President

  

 

 4Exhibit 10.8

EMPLOYMENT
AGREEMENT

Agreement, made as of this 8th day of August,
2006 (“Effective Date”), between Crown Media Holdings, Inc., a Delaware
corporation, with offices at 12700 Ventura Boulevard, Los Angeles, California
91604 (“Employer”) and Paul Fitzpatrick (“Employee”).

WHEREAS, Employer desires to continue to employ
Employee as provided herein and Employee desires to be employed by Employer
upon the terms and conditions set forth:

NOW, THEREFORE, in
consideration of the covenants herein contained, the parties hereto agree as
follows:

1.      Employment
Duties.

(a)    As of the
Effective Date, Employer and Employee agree to terminate any and all existing
agreements between them and agree to extend Employee’s employment pursuant to
the terms of this agreement (“Employment Agreement”).  Employee agrees to continue to serve as
Executive Vice President and Chief Operating Officer.  Additionally, Employee agrees to serve in
such other capacities and perform responsibilities as shall be designated from
time to time by Employer.  Employee shall
use Employee’s best efforts to promote the interests of Employer and shall
devote Employee’s full business time, energy and skill exclusively to the
business and affairs of Employer during the “Term” (as “Term” is defined in
Paragraph 2 below).

(b)    During the
course of Employee’s employment hereunder, Employer may create or utilize
subsidiary companies for the production and distribution of programming or to
conduct the other activities and businesses of Employer.  Employer shall have the right, without
additional compensation to Employee, to loan or make Employee available to any
subsidiary of Employer or company in common ownership with Employer to perform
services for any programming, property or project owned or controlled by
Employer or any such entity, provided that Employee’s services for any such
entity shall be consistent with Employee’s duties hereunder.  Employee further agrees that all the terms of
this Employment Agreement shall be applicable to Employee’s services for each
such entity.

 

2.      Term
of Employment.  The term of Employee’s
employment (“Term”) with Employer shall commence on the Effective Date and
shall end on the second anniversary of the Effective Date, unless terminated
earlier as provided in Paragraph 8 of this Agreement or extended by mutual
agreement of the parties.

3.      Compensation.

(a)    Salary.  As compensation for Employee’s services
hereunder, Employer shall pay to Employee a base salary at the rate of Six
Hundred Fifty Thousand Four Hundred Seventy-Five Thousand Dollars ($650,475.00)
per year.  During the Term and any
extensions, Employer will consider an adjustment of Employee’s base salary in
September of each year.

(b)    Performance
Bonus.  Contingent on employment
through each year end; the end of the Term; or for termination of employment
pursuant to paragraph 8(b) below, following the end of each calendar year
during the Term, Employee will be paid a bonus, to be prorated for partial
calendar years within the Term, in an amount based on achievement of the
financial goals set forth in Schedule A, attached hereto.  Such bonus will be paid to Employee on the
date following the applicable calendar year that Employer designates for
payment of bonuses to its employees in general.

(c)    RSUs.  Employer will award to Employee Restricted
Stock Units (“RSUs”) in an RSU agreement (attached as Schedule B) and pursuant
to the terms of and conditions of the Amended and Restated Crown Media
Holdings, Inc. 2000 Long Term Incentive Plan (attached as Schedule C).  Employee has also been granted RSUs under
prior agreements which are attached hereto as Schedule D (collectively, with
the Schedule B agreement, referred to herein as the “RSU Agreements”).

(d)    Withholding.  All payments of salary shall be made in
appropriate installments to conform with the regular payroll dates for salaried
personnel of Employer.  Employer shall be
entitled to deduct from each payment of compensation amounts required under
applicable laws or for participation in any employee benefit plans.

(e)    Expenses.  During the Term, Employer shall pay or
reimburse Employee on an accountable basis for all reasonable and necessary
out-of-pocket expenses for entertainment, travel, meals, hotel accommodations
and other expenditures incurred by Employee in connection with Employee’s
services to Employer in accordance with Employer’s expense account policies for
its senior executive personnel or with the approval of the Chief Executive
Officer of Employer.  When Employee is required
to 

 2
 

 

travel by air for
business reasons, Company shall provide business class air accommodations, or,
if business class is not available within the United States, then first class.

(f)     Fringe
Benefits.  During the Term, Employee
shall be entitled to receive the following fringe benefits: (i) group medical,
dental, life and disability insurance as per Employer policy; (ii) any other
fringe benefits on terms that are or may become available generally to
comparable employees of Employer. 
Employee shall also be entitled to five (5) weeks paid vacation for each
year of the Term in accordance with Employer’s vacation policy.

4.      Place
of Employment.  During the Term,
Employee shall be required to perform Employee’s duties at the offices of
Employer in New York City, or at such other principal location in the New York
City metropolitan area as Employer may designate from time to time, and
Employee shall undertake a reasonable travel required by Employer in connection
with the performance of Employee’s duties hereunder.

5.      Confidentiality,
Intellectual Property; Name and Likeness.

(a)    Employee
agrees that Employee will not during the Term or thereafter divulge to anyone
(other than Employer and its executives, representatives and employees who need
to know such information or any persons designated by Employer) any knowledge
or information of any type whatsoever designated or treated as confidential by
Employer relating to the business of Employer or any of its subsidiaries or
affiliates, including, without limitation, all types of trade secrets, business
strategies, marketing and distribution plans as well as concrete proposals,
plans, scripts, treatments and formats described in subparagraph (b)
below.  Employee further agrees that
Employee will not disclose, publish or make use of any such knowledge or
information of a confidential nature (other than in the performance of Employee’s
duties hereunder) without the prior written consent of Employer.  This provision does not apply to information
which becomes available publicly without the fault of Employee or information
which Employee discloses in confidence to Employee’s own privileged representatives or is required to disclose in
legal proceedings, provided Employee gives advance notice to the Executive Vice
President, Legal and Business Affairs and General Counsel of Employer and an
opportunity to Employer to resist such disclosure in legal proceedings.

 3
 

 

(b)    During the
Term, Employee will disclose to Employer all concrete proposals, plans,
scripts, treatments, and formats invented or developed by Employee during the
Term which relate directly or indirectly to the business of Employer or any of
its subsidiaries or affiliates including, without limitation, any proposals and
plans which may be copyrightable, trademarkable, patentable or otherwise
exploitable.  Employee agrees that all
such proposals, plans, scripts, treatments and formats are and will be the
property of Employer.  Employee further
agrees, at Employer’s request, to do whatever is necessary or desirable to
secure for the Employer the rights to said proposals, plans, scripts,
treatments, and formats, whether by copyright, trademark, patent or otherwise
and to assign, transfer and convey the rights thereto to Employer at Employer’s
expense.

(c)    Employer
shall have the right in perpetuity to use Employee’s name in connection with
credits for programming, properties and projects for which Employee performs
any services pursuant to this Agreement.

6.      Employee’s
Representations.  Employee represents
and warrants that Employee has the right to enter into this Agreement and is
not subject to any contract, commitment, agreement, arrangement or restriction
of any kind which would prevent Employee from performing Employee’s duties and
obligations hereunder.

7.      Non-Competition;
No Raid.

(a)    During the
Term, Employee shall not engage directly or indirectly, whether through
self-employment or as an employee, independent contractor, consultant, partner,
shareholder or otherwise, in a business or other endeavor which materially
interferes with any of Employee’s duties or obligations hereunder or which is
directly competitive with the business of the Employer or its subsidiaries,
including but not limited to the production, distribution or any other
exploitation of audiovisual television material (the “Other Business”).  In the event of a breach of this Paragraph
7(a) by Employee or a claim by Employee pursuant to this paragraph, both
Employer and Employee shall have all of the remedies available to Employer at
law or equity.  In the event time is of
the essence, notwithstanding paragraph 9 below, Employee and Employer agree
that temporary and permanent injunctive relief may be sought by either in a
court of law.

(b)    Employee
further agrees that during the Term and for a period of one year thereafter,
Employee will not employ, or attempt to employ or assist anyone else 

 4
 

 

to employ, any person who
is, at the date of termination of Employee’s employment, working as an officer,
policymaker or in high-level creative development or distribution (including
without limitation executive employees) for or rendering substantially
full-time services as such to Employer.

8.      Termination.

(a)    This
Agreement may be terminated and the Term ended on five (5) business days’
written notice for any one of the following reasons (except (i) in which case
termination shall occur on the date of death):

(i)     The death
of Employee;

(ii)    A serious
health condition of Employee that incapacitates Employee (as defined under the
Family Medical Leave Act) for a period exceeding an aggregate of twelve (12)
work weeks during any twelve month period of the Term.  For purposes of counting the aggregate work
weeks, days properly designated by Employee as vacation days shall not be
counted;

(iii)   For “cause,”
which for purposes of this Agreement shall be defined as:

(A)   The use of
drugs and/or alcohol which interfere materially with Employee’s performance of
Employee’s services under this Agreement;

(B)   Employee’s
conviction of any act which constitutes a felony under federal, state or local
laws or the law of any foreign country;

(C)   Employee’s
persistent failure or refusal after written notice to perform any of Employee’s
duties and responsibilities pursuant to this Agreement;

(D)   Employee’s
dishonesty in financial dealings with or on behalf of Employer, its
subsidiaries, affiliates and parent corporation or in connection with
performance of Employee’s duties hereunder; or

(E)    Employee’s
material breach of any provision of this Agreement.

(b)    Employer
shall also have the right to terminate Employee at any time prior to the
expiration of the Term in addition to pursuant to Paragraph 8(a) above by
providing Employee with written notice. 
In the event of a termination pursuant to this Paragraph 8(b), Employee
shall not be entitled to any further compensation or benefits 

 5
 

 

except (1) as may be
provided under the RSU Agreements; (2) the greater of twelve (12) months base
salary or the remaining base salary described in Paragraph 3(a) above for the
balance of the Term (as though no termination had occurred) (“Severance Period”),
paid in a lump sum and discounted at “prime” rate’s to present value at the
time of payment; (3) vested ERISA benefits (e.g., 401k plan); (4) benefits that
may be required by law (e.g., COBRA); and (5) prorata bonus through the date
Employee’s job duties end to be paid as provided in paragraph 3(b) above.  Employee shall have no obligation to seek
comparable employment and if Employee does accept other employment during the
Severance Period, there will be no offset by Employer against the amounts
payable under this Paragraph 8(b).  If
Employer terminates Employee under this Paragraph 8(b), Paragraph 7(a) shall
not apply from the date of termination.

(c)    In the
event that Employer terminates this Agreement due to any of the reasons set
forth in Paragraph 8(a) above, Employee shall be paid Employee’s salary through
the later of the expiration of the five (5) business days period referred to in
Paragraph 8(a) or the end of the month in which the termination event occurs,
after which Employer’s obligation to pay salary to Employee shall
terminate.  After making the payments
provided for in this sub-paragraph (c), Employer shall have no further
obligations to Employee pursuant to this Agreement, except (1) as may be
provided under the RSU Agreements; (2) vested ERISA benefits; or (3) benefits
that may be required by law (e.g. COBRA)..

(d)    Upon
termination of this Agreement Employee shall promptly return all of Employer’s
records and property to Employer.

(e)    Upon
termination of Employee’s employment for any reason, Employee shall tender
Employee’s resignation from the Board of Directors of any of Employer’s
subsidiaries or affiliates on which Employee is serving, and Employer shall
accept such resignation forthwith.

9.      Arbitration.  Any dispute between the Employee and Employer
involving any provision of this Agreement or employment matter; including any
claim of discrimination under state and federal law, other than an action in
court requesting temporary or permanent injunctive relief as set forth in
paragraph 7 above, shall be resolved by arbitration under the employment rules
of the American Arbitration Association and in accordance with applicable law,
allowing all damages and remedies 

 6
 

 

available in a court
action.  Such arbitration shall be
conducted in the New York City metropolitan area before one (1) neutral
arbitrator who is a lawyer with expertise in employment law.  Employer shall pay the expenses of the
arbitration and each party shall pay its own legal fees and expenses.  The arbitrator shall provide a reasoned
opinion supporting his/her conclusion, including detailed findings of fact and
conclusions of law.  Such findings of
fact shall be final and binding on the parties, but such conclusions of law
shall be subject to appeal in any court of competent jurisdiction.  The parties further stipulate that the laws
of New York shall apply to any dispute or action regarding this Agreement.

10.    Assignment.  This Agreement is a personal contract and,
without the prior written consent of Employer, shall not be assignable by the
Employee.  The rights and obligations of
Employer may be assigned and such assignment shall bind in their entirety the
successors and assigns of Employer.  As
used in this Agreement, the term “successor” shall include any person, firm,
corporation or other business entity which at the time, whether by merger,
purchase or otherwise, acquires all of substantially all of the assets or
business of Employer.

11.    Amendment;
Captions.  This Agreement contains
the entire agreement between the parties. 
It may not be changed orally, but only by agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.  Paragraph headings
are for convenience of reference only and shall not be considered a part of
this Agreement.  If any clause in this
Agreement is found to be unenforceable, illegal or contrary to public policy,
the parties agree that this Agreement shall remain in full force and effect
except for such clause.

12.    Prior
Agreements.  This Agreement
supersedes and terminates all prior employment agreements between the parties;
provided, however, that in the event of a Change in Control as defined in
Schedule C attached hereto, the severance provided in the Severance Plan
(attached as Schedule E) will control for so long as the Plan is in
effect.  Subject to the foregoing
provision, this Employment
Agreement and the schedules attached hereto set out the full agreement between
the parties concerning Employee’s employment.

13.    Notices.  Any notices or other communications required
or permitted hereunder shall be in writing and shall be deemed effective when
delivered in person or if 

 7
 

 

mailed, by registered or
certified mail, return receipt requested, in which case the notice shall be
deemed effective on the date of deposit in the mails, postage prepaid,
addressed to Employee at the address for Employee appearing in Employer’s
records.  Notices to Employer shall be
addressed to its Chief Executive Officer at the address first written above,
with a copy to the Executive Vice President of Legal and Business Affairs,
Crown Media Holdings, Inc., 12700 Ventura Blvd., Studio City, CA  91604. 
Either party may change the address to which notices are to be addressed
by notice in writing given to the other in accordance with the terms hereof.

14.    Periods
of Time.  Whenever in this Agreement
there is a period of time specified for the giving of notices or the taking of
action, the period shall be calculated excluding the day on which the giver
sends notice and excluding the day on which action to be taken is actually
taken.

15.    Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, and all of which, taken
together, shall constitute one instrument.

IN WITNESS WHEREOF, Employer has by its appropriate
officer signed this Agreement and Employee has signed this Agreement as of the
day and year first above written.

	
  

  	
  CROWN MEDIA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Charles Stanford

  
	
   

  	
  Title

  	
  EVP, General Counsel

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
  /s/ Paul FitzPatrick

  

 

 8

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