Document:

Exhibit 10.1

 

STOCK PURCHASE AGREEMENT

 

STOCK PURCHASE AGREEMENT (this “Agreement”),
dated March 9, 2005, between Coast Capital Finance, LLC, a limited
liability company organized under the laws of New Jersey (the “Purchaser”), and EquiFin, Inc., a Delaware corporation
(the “Company”).

 

RECITALS

 

A.                                   The
Company owns all of the outstanding shares of capital stock of Equinox Factors,
Inc., a Florida corporation (“Equinox Factors”);

 

B.                                     Equinox
Factors has been operating at a loss, which has required the Company to
regularly fund its cash shortfalls;

 

C.                                     The
Company has limited financial resources and does not intend to continue
on-going operations, including, without limitation, continuing the operations
of Equinox Factors;

 

D.                                    The
Company had attempted to sell Equinox Factors to other parties, but to date,
has not been able to effectuate such a sale;

 

E.                                      The
Company desires to continue its efforts to effectuate such a sale for an
additional limited period of time without the necessity of funding additional
losses if it is unable to complete such a sale on terms that it deems
desirable;

 

F.             The
Company desires to sell, and the Purchaser desires to buy, on the terms and
conditions set forth in this Agreement, all of the capital stock of Equinox
Factors; and

 

G.                                     The
Company and the Purchaser desire to make certain representations, warranties,
covenants and agreements in connection with the transactions contemplated
hereby.

 

AGREEMENT

 

In
consideration of the foregoing and the respective representations, warranties,
covenants and agreements set forth herein, and intending to be legally bound
hereby, the parties agree as follows:

 

 

ARTICLE I

AGREEMENT TO PURCHASE AND SELL CAPITAL STOCK

 

1.              Agreement to
Purchase and Sell Capital Stock. 
Upon the terms and subject to the conditions of this Agreement, and in
consideration of the covenants of Purchaser contained in this Agreement, the
Company hereby sells to Purchaser, and Purchaser hereby purchases, 100 shares
(the “Shares”) of common stock, $.01 par value per share, of Equinox Factors,
representing all of the voting Shares outstanding of Equinox Factors.  Simultaneous herewith, the Company is
delivering to Purchase a certificate or certificates representing the Shares
registered in the name of the Purchaser. 
The Company will pay any issuance, sale or transfer taxes in connection
with this transaction on behalf of the Purchaser.  The certificate or certificates representing
the Shares shall be subject to a legend restricting transfer under the
Securities Act of 1933, as amended (the “Securities Act”) and referring to
restrictions on transfer herein, such legend to be substantially as follows:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED.  SUCH SHARES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AS TO THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION.”

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The
Purchaser hereby represents and warrants to the Company as follows:

 

1.              Investment.  The Purchaser is acquiring the Shares for
investment for its own account, not as a nominee or agent, and not with a view
to, or for resale in connection with, any distribution thereof.  The Purchaser understands that the Shares
have not been registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of the Purchaser’s representations and warranties contained herein.

 

2.              Disclosure
of Information.  The Purchaser
believes that it has received all information it considers necessary or
appropriate to make an informed investment decision with respect to the Shares
to be purchased by the Purchaser under this Agreement.  The Purchaser further has had an opportunity
to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Shares and to obtain additional information
necessary to verify any information furnished to the Purchaser or to which the
Purchaser had access.

 

2

 

ARTICLE III

COVENANTS OF PURCHASER AND SELLER

 

1.              Conduct of
Business.  Purchaser agrees that from
and after the date hereof, through the end of the “Reacquistion Period” (as
defined in Section 2 of this Article III), the operations and
activities of the Equinox Factors’ factoring business shall be conducted only
in the ordinary course of business consistent with past practice.  Without limitation of the foregoing, from and
after the date hereof through the end of the Reacquisition Period, Purchaser
agrees that:

 

(i) It
will use its reasonable best efforts to maintain, or cause Equinox Factors to
maintain, all contracts and the relations and goodwill of employees, customers
and others relating to Equinox Factors’ operations, including using its best
efforts to maintain, or causing Equinox Factors’ to maintain, factoring
facilities with those customers set forth on Schedule A, which customers
and the accounts receivable purchased from them, shall, to the extent such
factoring facilities and accounts receivable are owned or controlled by
Purchaser (or any of its affiliates), be subject to the Company’s reacquisition
right set forth in Section 2 and shall, for the purpose of such
reacquisition right in said Section 2, be considered part of Equinox
Factors’ operations;

 

(ii) It
will not permit Equinox Factors to declare or pay any dividends, repurchase or
redeem any capital stock or make any other distribution of its assets;

 

(iii) It
will not permit Equinox Factors to acquire or agree to acquire any business,
corporation or entity;

 

(iv) It
will not permit Equinox Factors to incur any indebtedness with respect to its
business except in the ordinary course of business consistent with past
practice; and

 

(v) It will not permit Equinox
Factors to increase the amount of compensation paid to any of its employees or
pay or agree to pay any pension, retirement allowance, or other employee
benefit, not required by an existing plan, collective bargaining agreement or
arrangement, to any employee past or present.

 

2.              Right to Reacquire Equinox
Factors.  If prior to April 15,
2005, the Company gives written notice (a “Reacquisition Notice”) to Purchaser
that it desires to repurchase Equinox Factors, then the Company shall have the
right, for a period expiring on May 15, 2005, to reacquire the Shares and
Equinox Factors’ operations for the “Reaquisition Price” (as hereinafter
defined) (the time period during which the Company has such reacquisition right
is referred to as the “Reacquisition Period”). 
In addition, if the Purchaser
shall at any time become the subject of an asserted or threatened claim, or a
party to litigation, arising from the sale of the Shares to Purchaser pursuant
to this Agreement or otherwise relating to the transfer of Equinox Factors’
operations, then the Purchaser shall, upon notice to the other, have the right
to require the reacquisition of the Shares and Equinox Factors’ operations by,
or sale of the Shares and Equinxo Factors operations to, the Company for a
price equal to the Reacquisition Price.  For

 

3

 

purposes of the
foregoing, the “Reacquisition Price” shall mean, (i) the Company’s assumption
of all obligations and liabilities relating to the operations of Equinox
Factors, including, without limitation, all obligations relating to
participations in the purchased accounts receivable that are being transferred
to the Company, directly or indirectly, in connection with the reacquisition,
together with (ii) the Company’s cash payment to the Purchaser of an amount equal
to, as of the date immediately preceding the closing of the reaquisition of the
Shares and Equinox Factors’ operations by the Company, the Purchaser’s and its
affiliates’ net investment in Equinox Factors and such operations. Upon the
closing of the reacquisition of the Shares and Equinox Factors’ operations by
the Company, Purchaser shall be released from any further obligation pursuant
to clause (ii) of Section 2 of Article IV with respect to liabilities
or obligations arising after such closing. 
For purposes of determining the “Reacquisition Price,” the Purchaser’s
and its affiliates’ net investment in Equinox Factors’ operations shall consist
of the net amount of all cash and other property contributed by them to Equinox
Factors and its operations subject to the reacquisition right contained
herein.  For the avoidance of doubt, it
is the intent and purpose of the parties and this Section 2 that, in the
event the reacquisition right provided for in this Section 2 is exercised
by the Company, upon the closing of the reacquisition pursuant thereto, the
parties and their affiliates will be returned, to the extent practicable, to
the position they would have been in if: 
(x) the Shares had never been transferred from the Company to Purchaser
and all of Equinox Factors’ operations that are subject to the reacquisition
right had been at all times been operated, directly or indirectly, by the
Company; and (y) all of the operations subject to the reacquisition right had
merely been being managed by the Purchaser and its affiliates for the benefit
of the Company, with all gains and losses arising from such operations, as the
case may be, inuring to the benefit of, and being borne by, the Company.

 

3.              No
Limitation on Other Activities of Purchaser.  Except as expressly set forth in Section I
of this Article III, nothing contained herein shall be construed to limit
the activities of Purchaser, including, without limitation, entering into
factoring or other credit facilities outside of Equinox Factors even if such
activities compete with Equinox Factors. 
Nothing shall require Purchaser to renew, or continue, any account in
the Equinox Factors portfolio if in default or at termination.

 

ARTICLE IV

INDEMNIFICATION

 

1.              Obligations of the
Company.  The Company agrees to indemnify
and hold harmless the Purchaser and its directors, officers, employees,
affiliates and agents from and against any and all losses, costs, damages,
disbursements, expenses, liabilities, penalties or settlements of any kind or
nature, including reasonable attorney and other professional fees and expenses which
shall be paid by the Company as incurred by Purchaser and any amounts paid in
settlement (“Losses”), incurred or suffered by any of them, directly or
indirectly, as a result of, or based upon or arising from any claim, suit,
demand, action, threatened or actual, relating to, or arising from any aspect
of the initiation of this Agreement, any inaccuracy in, or breach or
nonperformance of any of the agreements made by the Company in, pursuant to, or
as a result of, this Agreement.

 

4

 

2.              Obligations
of the Purchaser.  The Purchaser
agrees to indemnify and hold harmless the Company and its directors, officers,
employees, affiliates and agents from and against any and all Losses incurred
or suffered by any of them, directly or indirectly, as a result of, or based
upon or arising from:(i) any inaccuracy in or breach or nonperformance of any
of the representations, warranties, or agreements made by the Purchaser in or
pursuant to this Agreement; and (ii) any liability or obligation pertaining to
the operations of Equinox Factors for which the Company may continue to be
liable from and after the transfer of the Shares to Purchaser, including,
without limitation, any and all obligations and liabilities arising under that
certain lease of real property expiring
August 2006, for suite 115, 3507 Frontage Road, Tampa, Florida.

 

3.              Settlement
of Third Party Claims.  Notwithstanding
anything else to the contrary contained herein, in no event shall any
indemnifying party have any liability to an indemnified party pursuant to the
foregoing provisions of this Article IV with respect to the settlement of
a claim effected without such indemnifying party’s prior written consent.

 

ARTICLE V

MISCELLANEOUS

 

1.               Further Assurances.  Each of the Company and the
Purchaser shall execute such further instruments and documents and do such
further acts and things consistent with the provisions of this Agreement as are
reasonably requested by the other to effectuate the intent and purpose of this
Agreement.

 

2.              Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New Jersey, without
regard to conflicts of law principles.

 

3.              Successors and
Assigns.  This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

 

4.              Amendments;
etc.  No amendment, modification,
termination, or waiver of any provision of this Agreement, and no consent to
any departure by a party to this Agreement from any provision of this
Agreement, shall be effective unless it shall be in writing and signed and
delivered by the other party hereto, and then it shall be effective only in the
specific instance and for the specific purpose for which it is given.

 

5.              Entire
Agreement.  This Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof and supersedes all prior
agreements and understandings among the parties relating to the subject matter
hereof.

 

6.              Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restriction of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

 

5

 

7.              Headings.  The descriptive headings of the Articles,
Sections and subsections of this Agreement are for convenience only and do not
constitute a part of this Agreement.

 

8.              Counterparts.  This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if all signatures were on the same instrument.

 

9.              No
Implied Rights in Third Parties.  Nothing expressed or implied in this Agreement
is intended to confer upon any person, other than the parties hereto, or their
respective successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

 

10.       Survival
of Representations, Warranties and Agreements.  The representations, warranties, covenants
and agreements contained in or made pursuant to this Agreement shall survive
the closing of the sale and the purchase of the Shares to Purchaser
indefinitely.

 

IN WITNESS WHEREOF,
the parties have executed and delivered this Agreement as of the date first
written above.

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  COAST CAPITAL
  FINANCIAL, LLC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  EQUIFIN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
									

 

6Exhibit
10.1

EXECUTION VERSION

AMENDMENT NO. 8 dated as
of March 1, 2005 to the Credit, Security, Guaranty and Pledge Agreement dated
as of August 31, 2001 as amended by Amendment 1 through 7 thereto,
dated as of December 14, 2001, December 31, 2001, March 29,
2002, May 14, 2002, February 5, 2003, August 4, 2003 and
October 28, 2004, among Crown Media Holdings, Inc. (the “Borrower”), the
Guarantors named therein, the Lenders referred to therein and JPMorgan Chase
Bank, N.A. (formerly known as JPMorgan Chase Bank), as Administrative Agent and
as Issuing Bank for the Lenders (the “Agent”) (as the same may be further
amended, supplemented or otherwise modified, the “Credit Agreement”).

INTRODUCTORY
STATEMENT

WHEREAS, the Lenders have made available to the Borrower
a credit facility pursuant to the terms of the Credit Agreement;

WHEREAS, Hallmark Cards, Incorporated has agreed to
provide the Agent, for the benefit of the Lenders, with a letter of credit in
an amount equal to the Total Commitment as credit support for the Obligations
of the Borrower;

WHEREAS, the Borrower has requested certain consents,
waivers, and amendments to the Credit Agreement, and the Lenders and the Agent
have agreed to such consents, waivers, and amendments, all on the terms and
subject to the conditions hereinafter set forth;

NOW THEREFORE, the
parties hereto hereby agree as follows:

Section 1.               Defined Terms.  Capitalized terms used herein and not
otherwise defined herein shall have the meaning given them in the Credit
Agreement.

Section 2.               Amendments to the Credit
Agreement.  Subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof, the
Credit Agreement is hereby amended as of the Effective Date (as hereinafter
defined) as follows:

(A)          Notwithstanding anything to the
contrary set forth in Amendment No. 7 to the Credit Agreement, the amendments
set forth therein with respect to (i) Section 6.10, (ii) the portion of Section
6.23 that excludes cash- and non-cash charges relating to the Foreign Asset
Sale from calculations of EBITDA, and (iii) the deletion of Sections 6.27 and
6.28, shall become effective as of the Effective Date hereof.

(B)           Article 1 is hereby amended by adding
the following definitions in the appropriate alphabetic sequence:

“‘Hallmark L/C’ shall mean an irrevocable
letter of credit issued to the Agent by Citibank, N.A. in the amount of the
Total Commitment as credit support for the Obligations of the Borrower,
substantially in the form of Exhibit R hereto.”

“‘Hallmark
Subordinated Participation’ shall have the meaning set forth in Section
14.1 hereof.”

“‘Junior Creditor’
shall mean the holder of the Hallmark Subordinated Participation.”

“‘Junior Obligations’
shall mean the obligation of the Borrower to repay the principal of, and
accrued interest on, the Hallmark Subordinated Participation.”

“‘Senior Obligations’ shall mean all
Obligations other than the Junior Obligations.”

(C)           Article 1 is hereby further amended
by replacing the references to “JPMorgan Chase Bank” appearing in the
definition of “Agent” and “Administrative Agent” with “JPMorgan Chase Bank,
N.A.”

(D)          Article 1 is hereby further amended by
replacing the references to “JPMorgan Chase Bank, a New York banking
corporation” appearing in the definition of “Issuing Bank”, with “JPMorgan Chase
Bank, N.A., a national banking association”.

(E)           The definition of “Commitment
Termination Date” in Article 1 is amended in its entirety to read as follows:

“‘Commitment Termination Date’ shall mean the
earlier to occur of (i) May 30, 2006 and (ii) such earlier date on which the
Total Commitment shall terminate in accordance with Section 2.8(a) or Article 7
hereof.”

(F)           The definition of “Maturity Date” in
Article 1 is amended in its entirety to read as follows:

“‘Maturity Date’ shall mean May 31, 2006.”

(G)           The definition of “Applicable Margin”
in Article 1 is amended in its entirety to read as follows:

“‘Applicable Margin’ shall mean (i) in the case
of Alternate Base Rate Loans, 0% per annum and (ii) in the case of Eurodollar
Loans, 1% per annum.”

(H)          The definition of “EBITDA” in Article
1 is amended in its entirety to read as follows:

“‘EBITDA’ shall mean, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, the sum for such period
of (i) Consolidated Net Income, (ii) interest expenses deducted in computing
Consolidated Net Income, (iii) provision for income taxes during such period,
(iv) total depreciation expense and (v) total amortization 

 

2

expense (vi) all other non-cash expenses and (vii) all
cash and non-cash items related to the Foreign Asset Sale, all as determined
for such period in conformity with GAAP.”

(I)            The definition of “Material Adverse
Effect” is hereby amended by deleting clause (e) in its entirety.

(J)            The definition of “Library Credit”
in Article 1 is deleted in its entirety.

(K)          The definition of “Change in
Management” in Article 1 is deleted in its entirety.

(L)           Section 2.1 is hereby amended by
deleting the last sentence in clause (a).

(M)         Section 2.4 is hereby amended by
deleting clause (a)(i)(A).

(N)          Section 2.5 is hereby amended by
inserting, at the end of clause (b), the sentence “Upon repayment in full of
the Term Loans, the Term Loan Commitment shall be reduced to zero.”

(O)          Section 2.7 is hereby amended by
replacing “0.5%” appearing in clause (a) thereof with “0.2%”.

(P)           Section 2.8 is hereby amended by
deleting clause (d) in its entirety.

(Q)          Section 2.11 is hereby amended by
deleting clauses (d) and (f) in their entirety.

(R)           Section 4.2 is hereby amended by
adding the following proviso at the end of clause (d) thereof:

“; provided, that after the Foreign Asset Sale
Effective Date, if, after giving effect to any such Borrowing, the aggregate
principal amount of all outstanding Loans plus the then-current L/C Exposure
would exceed $180,000,000, then the Borrowing Certificate must also be executed
by an Authorized Officer of Hallmark Cards.”

(S)           Section 5.1 is hereby amended in its
entirety to read as follows:

                “SECTION 5.1.  Financial
Statements and Reports.  Furnish or
cause to be furnished to the Agent:

                (a)           Within 90 days after the end of each
fiscal year, all audited financial statements that the Borrower was required to
submit to the S.E.C. as part of its public filings for such fiscal year;

                (b)           Within
45 days after the end of each of the first three fiscal quarters of each of its
fiscal years, all unaudited financial statements that the 

 

3

Borrower was required to
submit to the S.E.C. as part of its public filings for such fiscal quarter;

                (c)           Simultaneously
with the delivery of the statements referred to in paragraphs (a) and (b) of
this Section 5.1, a certificate of an Authorized Officer of the Borrower, in
form and substance satisfactory to the Agent (i) stating that in the course of
the performance of his duties, he would normally have knowledge of any
condition or event which would constitute an Event of Default or Default and
stating whether or not he has knowledge of any such condition or event and, if
so, specifying each such condition or event of which he has knowledge and the
nature thereof (ii) demonstrating in detail satisfactory to the Agent
compliance with the provisions of Sections 6.10, 6.15, 6.21, 6.23 and 6.24
hereof; and (iii) certifying that all filings required under Section 5.8 hereof
have been made and listing each such filing that has been made since the date
of the last certificate delivered in accordance with this Section 5.1(c);

                (d)           Notice of (i) any action taken by the
Board of Directors or governing body of any Credit Party in connection with the
issuance of any additional equity securities and (ii) the date on which such
Credit Party will receive the Net Cash Proceeds from the issuance of such
additional equity securities;

                (e)           From time to time such additional
information regarding the financial condition, business or business prospects
of the Credit Parties, the amount of film inventory in which any of the Credit
Parties has rights on an individual or market basis or otherwise regarding the
Collateral, as any Lender may reasonably request.”

(T)           Section 5.4 is hereby amended by
deleting the phrase “or would otherwise cause the loss of greater than
5,000,000 Subscribers” appearing in clause (a)(iv).

(U)          Section 5.4 is hereby further amended
by deleting clause (b) in its entirety.

(V)           Sections 5.6,  5.7, 5.14, 5.15, 5.17 and 5.19 are hereby
deleted in their entirety.

(W)         Section 6.5 is hereby amended in its
entirety to read as follows:

                “SECTION
6.5.  Restricted Payments.  Pay or declare or enter into any agreement to
pay or otherwise become obligated to make any Restricted Payments other than:

(i)            stock dividends paid solely in
shares of stock of the Borrower or another Guarantor which stock is not subject
to any mandatory redemption or redemption at the option of the holder;

(ii)           payments by a Credit Party to another
Credit Party;

 

4

(iii)          payments to HEDC pursuant to the HEDC
License Agreements;

(iv)          payments to Hallmark, Hallmark Cards
or an Affiliate (i) in payment of a valid outstanding obligation or (ii) in an
aggregate amount equal to the financial benefit received by the Borrower as a
result of the reduction of the Applicable Margin plus any fees and costs
incurred by Hallmark Cards or its Affiliate in connection with providing the
Hallmark L/C; provided that, in the case of both clauses (i) and (ii),
(x) no Default or Event of Default has occurred and is continuing after giving
effect on a pro forma basis to such payments, and (y) the Borrower is a public
company;

(v)           issuance of common stock for or upon
conversion of preferred stock or debt of the Borrower; and

(vi)          payments of dividends or other amounts
on preferred stock the issuance and terms of which have been approved by the
Required Lenders.”

(X)          Section 6.21 is hereby amended by
replacing the term “$140,000,000” appearing in the last line with “$175,000,000”.

(Y)           Section 6.23 is hereby amended by
replacing the table appearing therein with the following:

	
  Fiscal Quarter

  	
   

  	
  Amount

  	
   

  
	
  March 31, 2005

  	
   

  	
  - 15,000,000

  	
   

  
	
  June 30, 2005

  	
   

  	
  - 10,000,000

  	
   

  
	
  September 30,
  2005

  	
   

  	
  - 5,000,000

  	
   

  
	
  December 31,
  2005

  	
   

  	
  - 5,000,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  - 5,000,000

  	
   

  

 

(Z)           Section 6.24 is hereby amended in its
entirety to read as follows:

                “SECTION
6.24.  Platform Agreements.  Permit (i) the aggregate amount of all cash
payments to pay television distributors for Subscribers pursuant to the
Platform Agreements to be greater than $40,000,000 for fiscal year 2005, (ii)
allow the aggregate number of Subscribers (both paying and non-paying
Subscribers) to be less than 65,000,000 for fiscal year 2005, (iii) allow
annual aggregate gross Subscriber revenue of Credit Parties under the Platform
Agreements to be less than $25,000,000 for fiscal year 2005.”

(AA)       Section 6.25 is hereby deleted in its
entirety.

(BB)        Article
7 is hereby amended by deleting clause (l) in its entirety.

 

5

(CC)        Section 12.1 is hereby amended by
deleting the phrase “(other than any item included in the Library Credit)”
appearing in clause (b)(ii).

(DD)       Section 13.1 is hereby amended by
replacing the references to “The Chase Manhattan Bank” appearing therein with “JPMorgan
Chase Bank, N.A.”

(EE)         Section 13.11 is hereby amended by
deleting clause (vii) appearing therein.

(FF)         The following new Article 14 is hereby
added to the Credit Agreement:

                “14.         HALLMARK
SUBORDINATED PARTICIPATION

                                                                SECTION
14.1.  Sale and General Terms of
Participation Upon A Drawing Under the Hallmark L/C.

                (a)           The
net proceeds received by the Agent from a drawing under the Hallmark L/C shall
not be applied to repay Obligations but shall instead be treated as the
purchase price for the sale of a subordinated participation in the Obligations
from the Agent and the Lenders to Hallmark Cards.  Such subordinated participation in
the Obligations shall be purchased at the face amount and shall be hereinafter
referred to as the “Hallmark Subordinated Participation”.  If the amount of the drawing is less than the
amount of the outstanding Obligations, the purchase shall be deemed to be made
in the following order: (i) claims other than principal and interest, (ii)
interest, and (iii) principal.

                (b)           The
purchase and sale of the Hallmark Subordinated Participation shall be automatic
and shall not require any action on behalf of Hallmark Cards or on behalf of
the Lenders.  Such purchase and sale
shall be pro rata among all of the Lenders. 
To the extent that such purchase and sale is of the outstanding
principal amount of the Loans, the Agent shall give notice to each of the
Lenders and each Lender shall annex to its Note the notice from the Agent which
memorializes the amount of the subordinated participation being purchased in
that Note.

                (c)           Such
purchase and sale shall be without any representation, warranty or recourse to
the Agent or the Lenders; provided, however, that each Lender
makes a representation and warranty that it is the legal and beneficial owner
of the interest being assigned thereby and that such interest is free and clear
of any adverse claims.  The assigning
Lender makes no representation or warranty and assumes no responsibility with
regard to any of the statements, warranties or representations made in or in
connection with any Fundamental Document or as to the execution, legality,
validity, enforceability, genuineness or sufficiency or value thereof or of any
instrument or documentation furnished pursuant thereto.

                (d)           Once
all of the Senior Obligations have been paid in full, each of the Lenders
shall, if requested by Hallmark Cards and at the
expense of Hallmark Cards, endorse its Note without representation, warranty or
recourse to Hallmark Cards and deliver such Note to the Agent for delivery to
Hallmark Cards.  At that point in time,
the 

 

6

Credit Parties and
Hallmark Cards agree that the Agent may immediately resign notwithstanding any
provisions to the contrary contained in the Credit Agreement and that the Agent
and the Issuing Bank shall continue to be entitled to all of the indemnities
provided in the Credit Agreement as secured Lenders with regard to all matters
relating to periods or actions taken prior to their resignation.  To the extent that there are any Letters of
Credit outstanding at the time of a drawing under the Hallmark L/C, cash
received by the Agent subsequent to such drawing shall be used first to provide
cash collateral for such Letters of Credit.

                (e)           Notwithstanding
any provisions to the contrary in the Credit Agreement, the Junior Creditor
shall not be entitled to any right of consent or to vote under the Credit
Agreement or to receive any payments with regard to accrued interest and fees
or other amounts applicable to the Hallmark Subordinated Participation until
all of the Senior Obligations shall have been paid in full.

                (f)            The
Borrower acknowledges that the Total Commitment shall terminate upon the
drawing under the Hallmark L/C and that subsequent thereto neither the Agent,
the Issuing Bank nor the Lenders shall be obligated to provide any additional
credit whatsoever to the Credit Parties.

                                                                SECTION
14.2.  Agreement to Subordinate.  The Junior Creditor agrees that the Junior
Obligations are and shall be subordinate and junior in right of payment, to the
extent and in the manner hereinafter set forth, to the prior payment in full of
the Senior Obligations.  Interest on the
Hallmark Subordinated Participation shall accrue in accordance with the
provisions of Section 2.6 hereof, but no payment of principal or interest or
any other amounts shall be made with respect to the Junior Obligations until
all of the Senior Obligations have been paid in full.  Any payment of principal of, or interest on,
the Loans or any other amounts with regard to Obligations received or collected
by the Agent, any Lender or the Junior Creditor shall be allocated first
entirely to the Senior Obligations until the Senior Obligations are paid in
full and only thereafter allocated to the Junior Obligations.  The expressions “prior payment in full”, “payment
in full”, “paid in full” or any other similar term or phrase when used herein
with respect to the Senior Obligations shall mean the payment in full, in cash,
of all of the Senior Obligations.

                                                                SECTION
14.3.  Restrictions on Payment of the
Junior Obligations.  The Junior
Creditor shall not ask, demand, sue for, take or receive, directly or
indirectly, from any Credit Party, in cash or other property, by setoff, by
realizing upon the Collateral, foreclosing on any lien or otherwise, by
exercise of any remedies or rights under this Credit Agreement or by
executions, garnishments, or in any other manner, payment of, or additional
security for, all or any part of the Junior Obligations unless and until the
Senior Obligations shall have been paid in full.  The Credit Parties will not make any payment
of the Junior Obligations, or take any other action, in contravention of the
provisions of this Article 14.

                                                                SECTION
14.4.  Additional Provisions
Concerning Subordination.  The Junior
Creditor and the Credit Parties agree as follows:

 

7

                                                                (a)           In the event of (x) any dissolution,
winding-up, liquidation or reorganization of a Credit Party (whether voluntary
or involuntary and whether in bankruptcy, insolvency or receivership proceedings,
or upon an assignment for the benefit of creditors or proceedings for voluntary
or involuntary liquidation, dissolution or other winding-up of the Credit
Party, whether involving insolvency or bankruptcy, or any other marshalling of
the assets and liabilities of the Credit Party or otherwise), or (y) any Event
of Default or an event that with notice or passage of time would constitute an
Event of Default, or any default, demand for payment or acceleration of
maturity regarding the Junior Obligations:

                                                                                (i)            all Senior Obligations shall first
be paid in full to the Agent for the benefit of the holders of the Senior
Obligations before any payment or distribution is made upon the principal of,
interest on, or any fees, costs, charges or expenses in connection with, the
Junior Obligations; and

                                                                                (ii)           to the extent necessary to pay in
full all Senior Obligations remaining unpaid after giving effect to any
concurrent payment or distribution to the holders of the Senior Obligations,
any payment or distribution of assets of a Credit Party, whether in cash,
property or securities to which the Junior Creditor would be entitled except
for the provisions hereof, shall be paid or delivered by the Credit Party, or
any receiver, trustee in bankruptcy, liquidating trustee, disbursing agent,
agent or other person making such payment or distribution, directly to the
Agent to be applied to outstanding Senior Obligations before any payment or
distribution is made upon the Junior Obligations.

                                                                (b)           In any proceeding referred to or
resulting from any event referred to in subsection (a) of this Section 14.4
commenced by or against the Borrower:

                                                                                (i)            The Agent may, and is hereby
irrevocably authorized and empowered (in its own name or in the name of the
Junior Creditor or otherwise), but shall have no obligation to, (A) demand, sue
for, collect and receive every payment or distribution referred to in
subsection (a) of this Section 14.4 and give acquittance therefor, (B) file
claims and proofs of claim in respect of the Junior Obligations and (C) take
such other action as the Agent may deem necessary or advisable for the exercise
or enforcement of any of the rights or interests of the Agent and the Lenders.

                                                                                (ii)           The Junior Creditor will duly and
promptly take such action as the Agent may reasonably request to collect the
Junior Obligations for the account of the holders of the Senior Obligations and
to file appropriate claims or proofs of claim with respect thereto, to execute
and deliver to the Agent such powers of attorney, assignments or other
instruments as the Agent may request in order to enable it to enforce any and
all claims with respect to the Junior Obligations, and to collect and receive
any and all payments or distributions that may be payable or deliverable upon or
with respect to the Junior Obligations.

                                                                (c)           All payments or distributions upon or
with respect to the Junior Obligations that are received by the Junior Creditor
contrary to the provisions of this 

 

8

Article 14 shall be
deemed to be the property of the holders of the Senior Obligations, shall be
received in trust for the benefit of the holders of the Senior Obligations,
shall be segregated from other funds and property held by the Junior Creditor
and shall be forthwith paid over to the Agent for the benefit of the holders of
the Senior Obligations in the same form as so received (with any necessary
endorsement) to be applied to the payment or prepayment of the Senior
Obligation until the Senior Obligations shall have been paid in full.

                                                                (d)           The subordination provisions
contained herein are for the benefit of each holder of Senior Obligations and
may not be rescinded, modified or cancelled at any time without the prior
written consent of all holders.

                                                                (e)           So long as the Junior Obligations
remains outstanding, the Junior Creditor agrees not to assert any direct right
of legal redress against a Credit Party with respect to the Junior
Obligations.  The Junior Creditor hereby
authorizes the Agent to take legal action to enforce or protect their interest
with respect to the Senior Obligations as it may from time to time see fit.

                                                                (f)            Any holder of Senior Obligations may
at any time or from time to time grant to others assignments or participations
in the Loans pursuant to the terms of Section 13.3 hereof.  Any such assignment or participation shall
continue to be treated as a Senior Obligation of the Credit Parties and any
holder of such an assignment or participation shall be entitled to the benefits
of the subordination set forth in Section 14.2 above.  The Junior Creditor will not sell, assign or
otherwise dispose of the Junior Obligations or any portion thereof, or grant
any sub-participation therein, without the prior written consent of the
Required Lenders.”

(GG)        The Credit Agreement is hereby amended
to add Exhibit R to this Amendment No. 8 as Exhibit R to the Credit Agreement.

Section 3.               Consent.  The Borrower has requested that the Agent and
the Lenders consent to a waiver of compliance by the Borrower of (i) the
portion of Section 6.10 of the Credit Agreement which states that the Borrower
shall not make or incur any obligation to make Capital Expenditures in excess
of $13,000,000 for fiscal year 2004, (ii) the portion of Section 6.21 of the
Credit Agreement which states that the Borrower shall not incur cash program
acquisition guaranties to exceed $150,000,000 for fiscal year 2004; (iii) the
portion of Section 6.23 of the Credit Agreement which states that the Borrower
shall not permit EBITDA to be less than $40,000,000 for the fiscal quarter
ending December 31, 2004; (iv) the portion of Section 6.24 which states that
the Borrower shall not permit cash payments to television distributors to
exceed $8,000,000 for fiscal year 2004; (v) the portion of  Section 6.25 which states that the Borrower
will not permit Net Worth to be less than $150,000,000 for the fiscal quarter
ending December 31, 2004; (vi) the portion of Section 6.27 which states that
the Borrower will not permit the Leverage Ratio to exceed 12.00:1.00 in the
three-month period ending December 31, 2004; and (vii) the portion of Section
6.28 which states that the Borrower will not permit the Interest Coverage Ratio
to be less than 2.25:1.00 in the 12-month period ending December 31, 2004. At
the request of the Borrower, each Lender by its signature hereto hereby
consents to a 

 

9

waiver
of compliance by the Borrower with each of the provisions referred to in
clauses (i) through (vii) of this Section 3.

 

Section 4.               Agreement of the Agent.  The Agent hereby agrees that the amount of
the Hallmark L/C shall be reduced from $320,000,000 to $220,000,000 when the
Foreign Asset Sale Effective Date occurs and the aggregate outstanding Credit
Exposure of the Lenders is reduced to an amount not in excess of $220,000,000.

Section 5.               Conditions to Effectiveness.
The effectiveness of this Amendment is subject to the satisfaction in full of
each of the conditions precedent set forth in this Section 5 (the date on
which all such conditions have been satisfied being herein called the “Effective
Date”):

(A)          the Agent shall have received
counterparts of this Amendment which, when taken together, bear the signatures
of the Borrower, each Guarantor, the Agent and each Lender;

(B)           the Agent shall have received the
Hallmark L/C;

(C)           the representations and warranties in
Section 6 shall be true on the Effective Date;

(D)          all legal matters incident to this
Amendment shall be satisfactory to Morgan, Lewis & Bockius, counsel for the
Agent.

Section 6.               Representations and Warranties
of the Credit Parties.  Each Credit
Party represents and warrants that:

(A)          after giving effect to this Amendment,
the representations and warranties contained in the Credit Agreement are true
and correct in all material respects on and as of the date hereof as if such
representations and warranties had been made on and as of the date hereof
(except to the extent that any such representations and warranties specifically
relate to an earlier date); and

(B)           after giving effect to this
Amendment, no Event of Default or Default will have occurred and be continuing
on and as of the date hereof.

Section 7.               Further Assurances.  At any time and from time to time, upon the
Agent’s request and at the sole expense of the Credit Parties, each Credit
Party will promptly and duly execute and deliver any and all further
instruments and documents and take such further action as the Agent reasonably
deems necessary to effect the purposes of this Amendment.

Section 8.               Fundamental Documents.  This Amendment is designated a Fundamental
Document by the Agent.

Section 9.               Full
Force and Effect.  Except as
expressly amended hereby, the Credit Agreement and the other Fundamental
Documents shall continue in full force and effect in accordance with the
provisions thereof on the date hereof. 
As used in the Credit Agreement, the 

 

10

terms “Agreement”, “this Agreement”, “herein”,  “hereafter”, “hereto”, “hereof”, and words of
similar import, shall, unless the context otherwise requires, mean the Credit
Agreement as amended by this Amendment.

Section 10.             APPLICABLE LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 11.             Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.

Section 12.             Expenses.  The Borrower agrees to pay all out-of-pocket
expenses incurred by the Agent in connection with the preparation, execution
and delivery of this Amendment, including, but not limited to, the reasonable
fees and disbursements of counsel for the Agent.

Section 13.             Headings.  The headings of this Amendment are for the
purposes of reference only and shall not affect the construction of or be taken
into consideration in interpreting this Amendment.

 

[Signature pages follow.]

 

11

                                IN WITNESS WHEREOF, the parties hereby
have caused this Amendment to be duly executed 

as of the date first
written above.

 

	
   

  	
   

  	
   

  
	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  CROWN MEDIA
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Aliber

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  William J. Aliber

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  CM INTERMEDIARY,
  LLC

  
	
   

  	
  CROWN MEDIA
  INTERNATIONAL, LLC

  
	
   

  	
  CROWN MEDIA
  INTERNATIONAL (SINGAPORE) INC.

  
	
   

  	
  CROWN
  ENTERTAINMENT LIMITED

  
	
   

  	
  CROWN MEDIA
  DISTRIBUTION, LLC

  
	
   

  	
  CROWN MEDIA
  INTERNATIONAL (HK) LIMITED

  
	
   

  	
  HEN, LLC

  
	
   

  	
  HEN (L) LTD.

  
	
   

  	
  CROWN MEDIA
  UNITED STATES, LLC

  
	
   

  	
  CITI TEEVEE, LLC

  
	
   

  	
  DOONE CITY
  PICTURES, LLC

  
	
   

  	
  HALLMARK INDIA
  PRIVATE LIMITED

  
	
   

  	
  WAYZGOOSE
  CONCERT SERVICES, B.V.

  
	
   

  	
  CROWN MEDIA
  INTERNATIONAL (AUSTRALIA) PTY. LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Aliber

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  William J. Aliber

  
	
   

  	
   

  	
  Title: 

  	
  Chief Financial Officer

  
					

 

 

12

	
   

  	
  LENDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A. (f/k/a 

  
	
   

  	
  JPMorgan Chase Bank and as successor by merger

  
	
   

  	
  to Bank One, N.A. (Main Office Chicago)),

  
	
   

  	
  individually and as Agent and Issuing Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Garrett J. Verdone

  	
   

  
	
   

  	
   

  	
  Name: Garrett J. Verdone

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N. A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Thomas R. Durham

  	
   

  
	
   

  	
   

  	
  Name: Thomas R. Durham

  	
   

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Thomas S. Hall

  	
   

  
	
   

  	
   

  	
  Name: Thomas S. Hall

  	
   

  
	
   

  	
   

  	
  Title:
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Doreen Barr

  	
   

  
	
   

  	
   

  	
  Name:
  Doreen Barr

  	
   

  
	
   

  	
   

  	
  Title:
  Associate

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CITICORP
  USA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Maureen Maroney

  	
   

  
	
   

  	
   

  	
  Name:
  Maureen Maroney

  	
   

  
	
   

  	
   

  	
  Title:
  Director

  	
   

  

 

13

	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Frederick W. Laird

  	
   

  
	
   

  	
   

  	
  Name: Frederick W. Laird

  	
   

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Ming K. Chu

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Ming K. Chu

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ROYAL
  BANK OF CANADA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Stephanie Babich-Allegra

  	
   

  
	
   

  	
   

  	
  Name:
  

  	
  Stephanie
  Babich-Allegra

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ABN
  AMRO BANK N.V.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Terrence J. Ward

  	
   

  
	
   

  	
   

  	
  Name: Terrence J. Ward

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Angela Noïque

  	
   

  
	
   

  	
   

  	
  Name: Angela Noïque

  
	
   

  	
   

  	
  Title: Group Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WESTLB
  AG, NEW YORK BRANCH

  
	
   

  	
  (f/k/a
  Westdeutsche Landesbank Girozentrale)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Lucie L. Guernsey

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Lucie L. Guernsey

  
	
   

  	
   

  	
  Title:

  	
  Executive Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Barry S. Wadler

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Barry S. Wadler

  
	
   

  	
   

  	
  Title:

  	
  Associate Director

  
					

 

 

14

Exhibit R

 

Hallmark L/C

 

 

 

 

 

 

 

 

 

 

 

15

TEXT OF LETTER OF CREDIT

Irrevocable Standby
Letter of Credit No. ____

Issue Date ________

 

	
  BENEFICIARY:

  	
   

  	
  APPLICANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hallmark Cards, Incorporated   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  2501 McGee, P.O. 419126 Mail Drop #339

  
	
  (f/k/a JPMorgan ChaseBank), as

  	
   

  	
  Kansas City, MO 64108

  
	
  AdministrativeAgent

  	
   

  	
  Attn: General Counsel

  
	
  270 Park Avenue 

  	
   

  	
   

  
	
  New York, NY 10017

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attn: Garrett Verdone

  	
   

  	
  PLACE AND DATE OF EXPIRY:   

  
	
   

  	
   

  	
  office of our Servicer, Citicorp North America,

  
	
   

  	
   

  	
  Inc., 3800 Citibank Center, Building B, 3rd
  Floor,

  
	
   

  	
   

  	
  Tampa, Fl 33610

  
	
   

  	
   

  	
  June 10, 2006

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AMOUNT:  

  
	
   

  	
   

  	
  USD $320,000,000.00

  
	
   

  	
   

  	
  (Three Hundred Twenty Million and 00/100 USD)

  
	
   

  	
   

  	
   

  

At the request and on the instruction of Hallmark
Cards, Incorporated (the “Applicant”), we hereby establish our Irrevocable
Standby Letter of Credit in favor of JPMorgan Chase Bank, N.A. (f/k/a JPMorgan
Chase Bank), as Administrative Agent (the “Beneficiary”) under the Credit,
Security, Guaranty and Pledge Agreement dated as of August 31, 2001, among Crown
Media Holdings, Inc., the Guarantors referred to therein, the Lenders referred
to therein and the Beneficiary (as amended, and as the same may be further
amended, supplemented or modified from time to time, the “Credit Agreement”),
in the amount of $320,000,000.00 (Three Hundred Twenty Million and 00/100
USD).  This Letter of Credit is effective
immediately and shall automatically expire at 4:00 p.m. local time in Tampa,
Florida on June 10, 2006.

This Letter of Credit is subject to automatic
reduction from time to time upon receipt of a reduction certificate or
reduction certificates executed on behalf of the Beneficiary in the form of
Annex C hereto.

Funds under this
Letter of Credit will be made available to the Beneficiary against receipt by
us of a sight draft in the form attached hereto as Annex A accompanied by a
drawing certificate in the form of Annex B, presented for payment on a Business
Day (as hereinafter defined), with all blanks appropriately completed and
signed by a person purporting to be an authorized officer of the Beneficiary.

 

We agree that all draft(s) drawn under and in
compliance with the terms and conditions of this Letter of Credit shall be duly
honored upon presentation to us at the office of our Servicer, Citicorp North
America, Inc., at 3800 Citibank Center, Building B, 3rd Floor,
Tampa, Fl 33610.

As used herein “Business Day” shall mean any day other
than a Saturday, Sunday or other day on which banks in the city of New York,
New York are authorized or required to be closed.

Partial and multiple drawings are permitted under this
Letter of Credit.

This Letter of Credit sets forth in full the terms of
our obligations to the Beneficiary, and our undertaking shall not in any way be
amended or amplified by reference to any documents, instruments or any
agreement referred to herein or to which the Letter of Credit relates, and such
reference, if any, shall not in any way be deemed to incorporate herein by
reference any document, instrument or agreement.

If demand for payment made by the Beneficiary
hereunder does not, in any instance, conform to the terms and conditions of
this Letter of Credit, we shall give the Beneficiary prompt written notice that
the purported demand was not effected in accordance with the terms and
conditions of this Letter of Credit, stating the reasons therefor and that we
are holding any documents at the Beneficiary’s disposal or are returning the
same to the Beneficiary, as we may elect. 
Upon being notified that the purported demand was not effected in
conformity with this Letter of Credit, the Beneficiary may attempt to correct
any such nonconforming demand for payment to the extent that the Beneficiary is
entitled and able to do so and within the validity of this Letter of Credit.

Except as otherwise expressly stated herein, this Standby Letter of
Credit is subject to the International Standby Practices (“ISP98”),
International Chamber of Commerce, Publication No. 590, and as to matters not
governed by the ISP98, shall be governed by and construed in accordance with
the laws of the State of New York and applicable U.S. Federal Law.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signature

  	
   

  
				

 

	
   

  	
  ANNEX A

  
	
   

  	
  to

  
	
   

  	
  CITIBANK, N.A.

  
	
   

  	
  LETTER OF CREDIT

  
	
   

  	
  No.

  	
   

  	
   

  

 

SIGHT DRAFT

[Date]

At Sight

Pay to the order of JPMorgan Chase Bank, N.A. (f/k/a
JPMorgan Chase Bank), as Administrative Agent (the “Beneficiary”) under the
Credit, Security, Guaranty and Pledge Agreement dated as of August 31, 2001,
among Crown Media Holdings, Inc., the Guarantors referred to therein, the
Lenders referred to therein and the Beneficiary (as amended, and as the same
may be further amended, supplemented or modified from time to time), the sum of
                                                        
and                               
100 dollars ($                        )
drawn on CITIBANK, N.A., as issuer of its Irrevocable Standby Letter of Credit
No.              
dated                
2005.

 

 

 

 

	
   

  	
  JPMorgan Chase Bank, N.A. (f/k/a

  
	
   

  	
  JPMorgan Chase Bank), as Administrative

  
	
   

  	
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

	
   

  	
  ANNEX B

  
	
   

  	
  to

  
	
   

  	
  CITIBANK, N.A.

  
	
   

  	
  LETTER OF CREDIT

  
	
   

  	
  No.

  	
   

  	
   

  

 

DRAWING
CERTIFICATE

Citibank, N.A.

c/o its Servicer, Citicorp North America, Inc.

3800 Citibank Center, Building B, 3rd Floor

Tampa, Fl 33610

 

Attention:  Letter of Credit Department

 

Re:        Irrevocable
Letter of Credit No.             

 

Ladies and Gentlemen:

The undersigned, a
duly authorized officer of JPMorgan Chase Bank, N.A. (f/k/a JPMorgan Chase
Bank), as Administrative Agent (the “Beneficiary”), of that certain
Irrevocable Letter of Credit No.              ,
dated        , 2005 (the “Letter of
Credit”) certifies as follows to Citibank, N.A. as issuer of the Letter of
Credit:

 

1.             All
terms defined in the Letter of Credit are used in this certificate with the
same respective meanings.

 

2.             Either
(a) the amount of the drawing hereunder (i) is due
and payable under that the Credit Agreement and/or a related agreement or the
related notes and (ii) payment has not been made or (b) an event listed in
either paragraph (f) or (g) of Article 7 of the Credit Agreement has occurred.

 

3.             The
Beneficiary requests that payment be made to Account No.                    
at JPMorgan Chase Bank, N.A.

 

4.             The amount of the drawing being
made by this Certificate when added to the amount of any other drawing made
does not exceed the amount of the Letter of Credit as presently in effect.

 

IN WITNESS
WHEREOF, this Certificate has been executed this       
day of               .

 

	
   

  	
  JPMorgan Chase Bank, N.A. (f/k/a

  
	
   

  	
  JPMorgan Chase Bank), as Administrative

  
	
   

  	
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

	
   

  	
  ANNEX C

  
	
   

  	
  to

  
	
   

  	
  CITIBANK, N.A.

  
	
   

  	
  LETTER OF CREDIT

  
	
   

  	
  No.

  	
   

  	
   

  

 

REDUCTION
CERTIFICATE

Citibank, N.A.

c/o its Servicer, Citicorp North America, Inc.

3800 Citibank Center, Building B, 3rd Floor

Tampa, Fl 33610

Attention:  Letter of Credit Department

Re:  Irrevocable Standby Letter
of Credit No.            

 

Ladies and Gentlemen:

The undersigned, a duly authorized officer of JPMorgan
Chase Bank, N.A. (f/k/a JPMorgan Chase Bank), the Beneficiary under that
Irrevocable Standby Letter of Credit No.           
dated             ,
2005 (the “Letter of Credit”, all terms defined therein being used in this
certificate with the same respective meanings) issued by Citibank, N.A. in
favor of the Beneficiary, hereby consents to the reduction of the amount of
that Letter of Credit by $100,000,000 from $320,000,000 to $220,000,000.

IN WITNESS WHEREOF, this Certificate has been executed
this          day of               .

	
   

  	
  JPMorgan Chase Bank, N.A. (f/k/a JPMorgan

  
	
   

  	
  Chase Bank), as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]