Document:

<PAGE>
                                                                  EXHIBIT 10.7.1

================================================================================

                            STOCK PURCHASE AGREEMENT

                                     BETWEEN

                           CROWN MEDIA HOLDINGS, INC.

                                       AND

                            DIRECTV ENTERPRISES, INC.

                           DATED AS OF AUGUST 20, 2001

[*] Portion omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

================================================================================

<PAGE>

                            STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of August
20, 2001, by and between Crown Media Holdings, Inc., a Delaware corporation (the
"Company"), and DIRECTV Enterprises, Inc., a Delaware corporation ("DIRECTV").

                                    RECITALS

         WHEREAS, the Board of the Company has determined that it is in the best
interest of the Company to issue 5,360,202 shares of its Class A Common Stock to
DIRECTV for consideration equal to the par value thereof, in order to induce
DIRECTV to cause its wholly-owned subsidiary, DIRECTV, Inc., a California
corporation, to enter into the Affiliation Agreement (as defined below) and in
anticipation of an alignment of the Company's and DIRECTV's interests that will
provide DIRECTV, Inc. with an incentive to pursue the cooperative ventures set
forth in the Side Letter (as defined below);

         WHEREAS, concurrent with the execution of this Agreement, DIRECTV shall
cause DIRECTV, Inc. and the Company shall cause Crown Media United States, LLC
("Crown Media U.S.") (a Delaware limited liability company of which the Company
is the sole voting and managing member) to execute the Affiliation Agreement
providing for DIRECTV's carriage of the service known as the "Hallmark Channel;"

         WHEREAS, concurrent with the delivery of the DIRECTV Shares and the
consideration therefor, DIRECTV, Inc. and Crown Media U.S. shall enter into the
Side Letter;

         WHEREAS, DIRECTV acknowledges that the Company would not enter into
this Agreement without the Affiliation Agreement and the Side Letter.

         NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
Company and DIRECTV hereby agree as follows:

     1. DEFINITIONS

     The following terms used herein shall have the following meanings:

         "ACT" means the United States Securities Act of 1933, as amended.

         "AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.

         "AFFILIATION AGREEMENT" means that certain Affiliation Agreement
between DIRECTV, Inc. and Crown Media U.S. dated as of the date hereof.

         "AGREEMENT" has the meaning set forth in the Preamble.

                                       1
<PAGE>

         "AMENDED STOCKHOLDERS AGREEMENT" shall mean the Stockholders Agreement
as amended in accordance with Section 5.3.

         "CLOSING" has the meaning set forth in Section 2.2.

         "COMPANY" has the meaning set forth in the Preamble.

         "COMPANY BOARD" has the meaning set forth in Section 5.3.

         "COMPANY DEFAULT" has the meaning set forth in Section 13.

         "COMPANY SEC REPORTS" means all reports, schedules, forms, statements
and other documents required to be filed by the Company with the SEC since the
date of its initial public offering, including all exhibits thereto.

         "CROWN MEDIA U.S." has the meaning set forth in the Recitals.

         "DIRECTV" has the meaning set forth in the Preamble.

         "DIRECTV DEFAULT" has the meaning set forth in Section 13.

         "DIRECTV, INC." has the meaning set forth in the Recitals.

         "DIRECTV OBSERVER" has the meaning set forth in Section 5.3(a).

         "DIRECTV PROPORTION" has the meaning set forth in Section 12(a).

         "DIRECTV SHARES" has the meaning set forth in Section 2.1.

         "EQUITY" has the meaning set forth in Section 12(a).

         "EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended.

         "FILMS TRANSACTION" means the transaction, as set forth in the Purchase
and Sale Agreement, dated April 10, 2001, between the Company and Hallmark
Distribution, LLC, pursuant to which the Company anticipates issuing up to
35,294,118 shares of its Class A Common Stock to Hallmark Entertainment
Distribution, LLC, in connection with the proposed purchase by the Company of
certain films and related rights and properties of Hallmark Distribution, LLC.

         "FORM 10-Q" has the meaning set forth in Section 3.4.

         "FULLY DILUTED BASIS" means taking into account (i) all outstanding
shares of capital stock of the Company, including shares of common stock and
preferred stock of the Company; (ii) any outstanding or authorized options,
warrants and purchase rights (including subscription, conversion, exercise or
preemptive rights and rights of first refusal), and (iii) any other contracts or
commitments for the purchase or acquisition from the Company of any of its
securities or that could require the Company to issue, sell or otherwise cause
to become outstanding any of its

                                       2
<PAGE>

securities, excluding (x) commitments pursuant to the Films Transaction; and (y)
obligations pursuant to any "most favored nations" clause contained in any
distribution agreement of Crown Media U.S.

         "GOVERNMENTAL ENTITY" means any foreign, national, state, municipal or
local government, any instrumentality, subdivision, court, administrative agency
or commission or other authority thereof, or any quasi-governmental or private
body exercising any regulatory, taxing, or other governmental or
quasi-governmental authority.

         "INTELLECTUAL PROPERTY" has the meaning set forth in Section 3.1.

         "LAWS" means all applicable laws, regulations, rules, judgments, orders
and decrees of Governmental Entities.

         "LIABILITIES" means, absolute or contingent (individually or in the
aggregate), any and all claims, actions, suits, demands, assessments, judgments,
losses, liabilities, damages, costs, royalties, payments, license fees and
expenses (including interest, penalties, attorneys' fees, accounting fees and
investigation costs).

         "LIBERTY" has the meaning set forth in Section 5.3(c).

         "LIEN" means any mortgage, lien, pledge, charge, security interest,
restriction on voting or transfer, or other encumbrance.

         "ORGANIZATIONAL DOCUMENTS" means the certificate of incorporation,
bylaws or other governing documents of the Company as of the date hereof.

         "OTHER DISTRIBUTOR PROPORTION" has the meaning set forth in Section
12(a).

         "PAR CONSIDERATION" has the meaning set forth in Section 2.1.

         "PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
without limitation, a Governmental Entity.

         "SEC" means the Securities and Exchange Commission.

         "SHARE DELIVERY DATE" has the meaning set forth in Section 2.2.

         "SIDE LETTER" means that letter agreement entered into between DIRECTV,
Inc. and the Company on the Share Delivery Date, the form and substance of which
is set forth in Schedule 1 attached hereto.

         "STOCKHOLDERS AGREEMENT" has the meaning set forth in Section 4.4(b).

2. ISSUANCE OF THE DIRECTV SHARES

         2.1 Issuance of the DIRECTV Shares. Subject to the provisions of this
Agreement, the Company shall issue and deliver to DIRECTV, and DIRECTV shall
accept from the

                                       3
<PAGE>

Company, 5,360,202 shares of Class A Common Stock of the Company, par value
$0.01 per share (the "DIRECTV Shares"), representing, as of August 17, 2001, a
seven percent (7%) equity interest in the Company on a Fully Diluted Basis for
consideration in the amount of $53,602.02, which amount represents the par value
thereof (the "Par Consideration").

         2.2 Closing. Unless this Agreement has been terminated and the
transactions contemplated under this Agreement have been abandoned pursuant to
Section 7 and subject to the fulfillment or, if permitted, waiver of the
conditions set forth in Section 6, the delivery and closing of the issuance of
the DIRECTV Shares (the "Closing") will take place at the Los Angeles offices of
the Company on a date that is mutually agreed by the parties, but in no event
later than September 7, 2001 (the "Share Delivery Date").

         2.3 Deliveries at the Closing. At the Closing, (i) the Company shall
deliver or cause to be delivered to DIRECTV those certificates, instruments and
documents set forth in Section 6.2 below, and (ii) DIRECTV shall deliver or
cause to be delivered to the Company those certificates, instruments and
documents set forth in Section 6.1 below.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company hereby represents and warrants to DIRECTV that the
statements contained in this Section 3 are true and complete as of the date of
this Agreement and will be true and complete as of the Share Delivery Date (as
though made then and as though the Share Delivery Date were substituted for the
date of this Agreement) as follows:

         3.1 Corporate Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority to
own, lease and operate its business and assets and to carry on its business as
presently conducted. The Company has obtained all licenses, permits,
qualifications, franchises and other governmental authorizations material or
necessary to the operation of its business ("Licenses") and is in compliance
with all such Licenses, except for such failure to obtain such Licenses or
violations thereof which could not reasonably be expected to have a material
adverse effect on the business, financial condition or prospects of the Company.
The Company owns, or has the right to use, all trademarks, tradenames, service
marks, domain names, trade dress, patents, copyrights, technology, know-how,
trade secrets and processes material to the conduct by the Company of its
business in the ordinary course (collectively, "Intellectual Property"). No
claim has been asserted and is pending by any Person challenging or questioning
the use of any such intellectual property or the validity or effectiveness of
any such intellectual property, and to the Company's knowledge, the use of such
Intellectual Property does not infringe on the rights of any Person.

         3.2 Crown Media U.S. The Company is the sole voting and managing member
of Crown Media U.S. and has the requisite power and authority to make the
representations and warranties and covenants set forth herein with respect to
Crown Media U.S. and to cause Crown Media U.S. to fulfill its obligations
contained in this Agreement.

         3.3 Corporate Authority. The Company and Crown Media U.S., as
appropriate, each have the requisite corporate power and authority to execute
and deliver this Agreement, the

                                       4
<PAGE>

Amended Stockholders Agreement, the Affiliation Agreement and the Side Letter,
and to perform their respective obligations thereunder. The execution and
delivery of this Agreement, the Amended Stockholders Agreement, the Affiliation
Agreement and the Side Letter by the Company and Crown Media U.S., as
appropriate, and the performance of their respective obligations thereunder have
been duly authorized by all necessary corporate actions of the Company and Crown
Media U.S. No consent, approval, order or authorization of, or registration,
declaration or filing is required by or with respect to the Company in
connection with the execution and delivery of this Agreement and the Amended
Stockholders Agreement by the Company. or the performance of its obligations
thereunder, by (i) any Governmental Entity, including the SEC and any state
securities agency, except for the filing with the SEC of a Current Report on
Form 8-K and a Form D with respect to the issuance of the DIRECTV Shares and a
filing to be made pursuant to Section 25102.1(d) of the California Corporate
Securities Law to be filed with the California Department of Corporations, (ii)
the Nasdaq National Market or any other exchange on which any securities of the
Company are trading, quoted or listed, except for the filing of a Notification
Form: Change in the Number of Shares Outstanding to be filed with the Nasdaq
Stock Market; or (iii) any holder of equity or debt securities of the Company,
except for the Stockholders party to the Amended Stockholders Agreement. This
Agreement and the Affiliation Agreement are, and the Amended Stockholders
Agreement and the Side Letter upon their due and valid execution and delivery by
the parties thereto will be, legal, valid and binding obligations of the Company
and Crown Media U.S., as appropriate, enforceable against each in accordance
with their terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally. Neither the execution and delivery of this
Agreement, the Affiliation Agreement, the Side Letter and the Amended
Stockholders Agreement by the Company and Crown Media, U.S., as appropriate, nor
the performance of their respective obligations thereunder will (i) violate any
provision of their respective Organizational Documents; (ii) contravene any Laws
that affect the Company and Crown Media U.S.; or (iii) contravene, conflict
with, or result in a breach or default (or give rise to a right of termination)
of any provision of any license, agreement or instrument to which the Company or
an Affiliate is a party which would have a material adverse effect on the
business, financial condition or prospects of the Company.

         3.4 Capital Stock of the Company.

                  (a) As of August 17, 2001 the authorized capital stock of the
Company consists of (i) 200,000,000 shares of Class A Common Stock, $0.01 par
value per share, of which 34,799,370 shares are issued and outstanding,
10,000,000 have been reserved for issuance upon the conversion of options under
the Amended and Restated Crown Media Holdings, Inc. 2000 Long Term Incentive
Plan and 30,670,422 have been reserved for issuance upon conversion of Class B
Common Stock; (ii) 120,000,000 shares of Class B Common Stock, $0.01 par value
per share, of which 30,670,422 are issued and outstanding; and (iii) 10,000,000
shares of Preferred Stock, $0.01 par value per share, none of which are issued
and outstanding. All issued and outstanding shares Class A Common Stock and
Class B Common Stock of the Company are duly authorized, validly issued, fully
paid and non-assessable, and no class of the capital stock of the Company is
entitled to preemptive rights.

                  (b) Upon issuance in accordance with the terms of this
Agreement and against full delivery of the consideration therefor, the DIRECTV
Shares will have been duly authorized

                                       5
<PAGE>

and validly issued, will be fully paid and non-assessable, and will not have
been issued in violation of any preemptive rights. Other than as set forth in
Section 3.3(a) hereof and in Section 3.6 of the Stockholders Agreement, there
are no authorized, issued or outstanding (i) securities of the Company
convertible into or exchangeable for equity securities of the Company, (ii)
agreements, commitments, arrangements, warrants, options or other rights to
acquire from the Company, or other obligations or undertakings of any kind of
the Company, to issue any capital stock or securities convertible into or
exchangeable for equity securities of the Company or to issue, grant, extend or
enter into any such agreement, commitment or arrangement, warrant, option, or
other rights or undertaking, or (iii) bonds, debentures, notes or other
obligations or securities of the Company, the holders of which have the right to
vote with the stockholders of the Company, on any matter submitted for the vote
of the Company stockholders. There are no outstanding obligations of the Company
to repurchase, redeem or otherwise acquire any shares of capital stock of the
Company. Other than the Stockholders Agreement, there is no voting trust or
other agreement or understanding to which the Company is a party or is bound
with respect to the voting of the capital stock or other voting securities of
the Company.

                  (c) Based upon the representations and warranties of DIRECTV
set forth in this Agreement, the DIRECTV Shares will be issued in compliance
with all applicable U.S. federal and state securities laws.

                  (d) The DIRECTV Shares represent, as of August 17, 2001, on a
Fully Diluted Basis, a seven-percent (7%), equity interest in the Company.

                  (e) The issuance of the shares of the Company's Class A Common
Stock pursuant to the Films Transaction shall dilute the 7% equity interest
referred to in Section 3.3(d) above by not more than 2.33% such that immediately
following the Films Transaction DIRECTV's equity interest in the Company shall
be not less than 4.67%.

        3.5 Liabilities. Except as set forth on Schedule 3.4, the Company has no
Liabilities except (i) the Liabilities set forth in the financial statements or
the notes thereto, contained in its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2001 ("Form 10-Q"), as filed with the SEC, and (ii)
Liabilities which have been incurred subsequent to the filing of the Form 10-Q,
none of which are material to the Company, individually or in the aggregate, and
all of which are in the ordinary course of business.

        3.6 SEC Filings. The Company has filed all required Company SEC Reports.
None of the Company SEC Reports, as of their respective dates (and, if amended
or superseded by a filing prior to the date of this Agreement, then on the date
of such filing), contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of the financial statements (including the related notes)
included in the Company SEC Reports presents fairly, in all material respects,
the consolidated financial position and consolidated results of operations and
cash flows of the Company as of the respective dates or for the respective
periods set forth therein, all in conformity with U.S. generally accepted
accounting principles consistently applied during the periods involved except as
otherwise noted therein, and subject, in the case of the unaudited interim
financial statements, to normal and recurring year-end adjustments that have not
been and are not expected to be

                                       6
<PAGE>

material in amount. Since the initial public offering of the Company there has
been no material change in the Company's accounting methods or principles except
as described in the notes to the consolidated financial statements of the
Company contained in the Company SEC Reports. All of such Company SEC Reports,
as of their respective dates (and as of the date of any amendment to the
respective Company SEC Report), complied as to form in all material respects
with the applicable requirements of the Act and the Exchange Act and the rules
and regulations promulgated thereunder.

         3.7 Brokers or Finders. Neither the Company nor any of its directors,
officers or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees in connection with
the issuance of the DIRECTV Shares.

         3.8 Films Transaction. The Films Transaction shall be based on a
valuation of approximately $820 million as set forth in the Purchase and Sale
Agreement between the Company and Hallmark Entertainment Distribution, LLC,
dated April 10, 2001. Pursuant to the Films Transaction, the Company shall
assume $220 million in debt and payables and issue up to 35,294,118 shares of
the Company's Class A Common Stock to Hallmark Entertainment Distribution, LLC,
depending upon the average closing price of the Company's Class A Common Stock
from November 6, 2000 though the closing of that transaction, as consideration
for the purchase of the film assets.

         3.9 MFN Exclusion. The Company does not make any representations or
warranties as to, and none of the foregoing representations and warranties
extend to, any obligations or liabilities it may have pursuant to any "most
favored nations" clauses contained in any distribution agreements to which any
of its subsidiaries may be a party (subject to Section 12(a) of this Agreement).

         3.10 Material Contracts. The agreements set forth on Schedule 3.9
hereto represent all of the material agreements, licenses or instruments
relating to the securities and financing arrangements of the Company and any
entity it controls.

4. REPRESENTATIONS AND WARRANTIES OF DIRECTV

         DIRECTV hereby represents and warrants to the Company that the
statements contained in this Section 4 are true and complete as of the date of
this Agreement and will be true and complete as of the Share Delivery Date (as
though made then and as though the Share Delivery Date were substituted for the
date of this Agreement) as follows:

         4.1 Corporate Organization and Qualification. DIRECTV is a corporation
validly existing and in good standing under the laws of the State of Delaware.

         4.2 DIRECTV, Inc. DIRECTV, Inc. is the wholly owned subsidiary of
DIRECTV. DIRECTV has the requisite power and authority to make the
representations and warranties and covenants set forth herein with respect to
DIRECTV, Inc. and to cause DIRECTV, Inc. to fulfill its obligations contained in
this Agreement.

                                       7
<PAGE>

         4.3 Corporate Authority. DIRECTV and DIRECTV, Inc., as appropriate,
each have the requisite corporate power and authority to execute and deliver
this Agreement, the Affiliation Agreement and the Side Letter and to perform
their respective obligations thereunder. The execution and delivery of this
Agreement, the Affiliation Agreement and the Side Letter by DIRECTV and DIRECTV,
Inc., as appropriate, and the performance of their respective obligations
thereunder have been duly authorized by all necessary corporate actions. Such
agreements and undertakings are the legal, valid and binding obligations of
DIRECTV and DIRECTV, Inc., as appropriate, enforceable against each in
accordance with their terms except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally.

         4.3 Reliance on Own Advisors; Disclosure of Information. DIRECTV has
relied completely on the advice of DIRECTV's own tax, investment, financial,
legal or other advisors and has not relied on the Company or any of the
Company's affiliates, officers, directors, attorneys, accountants, or any
affiliates thereof for any tax or legal advice. DIRECTV has had an opportunity
to ask questions of and receive answers from the Company, and its
representatives regarding the Company, and its businesses, assets, results of
operations, and financial condition and the terms and conditions of the issuance
of the DIRECTV Shares. DIRECTV acknowledges that the Company has made no
representation or warranty as to the DIRECTV Shares, the businesses, assets,
results of operations or financial condition, except for the warranties
expressly set forth in this Agreement.

         4.4 Investment Representations.

         (a) DIRECTV acknowledges that (i) its acquisition of the DIRECTV Shares
involves a high degree of risk, (ii) it is familiar with the type of investment
that the DIRECTV Shares constitute, and (iii) it can bear the economic risks of
an investment in the DIRECTV Shares for an indefinite period and, consequently,
without limiting the generality of the foregoing, can sustain a loss of its
entire investment in the DIRECTV Shares in the event that such a loss should
occur. DIRECTV acknowledges that no guarantees have been made or can be made
with respect to the future value, if any, of the DIRECTV Shares, or the
profitability or success of the Company.

         (b) DIRECTV represents that the DIRECTV Shares are being acquired for
its own account solely for the purpose of investment and not with a view to, or
for sale or other disposition in connection with, any distribution or public
offering thereof within the meaning of the Act or any state's securities laws.
DIRECTV acknowledges that the DIRECTV Shares have not been registered under the
Act or any state's securities laws, and that the DIRECTV Shares may not be
transferred, pledged or sold except pursuant to the registration provision of
the Act and such state securities laws or pursuant to applicable exemptions
therefrom. DIRECTV understands that the certificates representing the DIRECTV
Shares, in addition to any other legend that may be required to be placed on the
certificates, will be printed with a legend substantially similar to the
following:

         THE STOCK REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
         PURSUANT TO THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, OR ANY
         FEDERAL OR STATE SECURITIES LAW. NEITHER THIS

                                       8
<PAGE>

         SECURITY NOR ANY PORTION HEREOF OR INTEREST HEREIN MAY BE SOLD,
         ASSIGNED, TRANSFERRED, PLEDGED (EXCEPT TO THE ISSUER HEREOF) OR
         OTHERWISE DISPOSED OF UNLESS THE SAME IS REGISTERED UNDER SAID ACT AND
         ANY APPLICABLE FEDERAL OR STATE SECURITIES LAW, OR UNLESS AN EXEMPTION
         FROM SUCH REGISTRATION IS AVAILABLE. THE SECURITIES ARE ALSO SUBJECT TO
         PROVISIONS OF THE AMENDED AND RESTATED STOCKHOLDERS AGREEMENT DATED
         MARCH 14, 2001, AS IT MAY BE AMENDED FROM TIME TO TIME IN ACCORDANCE
         WITH THE PROVISIONS THEREOF (THE "STOCKHOLDERS AGREEMENT"), WHICH
         CONTAINS RESTRICTIONS ON TRANSFER. COPIES OF THE STOCKHOLDERS AGREEMENT
         MAY BE OBTAINED FROM THE SECRETARY OF THE COMPANY.

         DIRECTV further understands that the reliance of the Company and others
upon the exemption from registration is predicated in part upon the
representations and warranties made in this Section 4.4 by DIRECTV.

         (c) DIRECTV represents that it is an "Accredited Investor" as defined
in Rule 501(a) of Regulation D promulgated under the Act.

         (d) Neither DIRECTV nor any of its directors, officers or employees has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders fees in connection with the issuance of the DIRECTV
Shares.

         4.5 Stock Ownership. Prior to the issuance of the DIRECTV Shares,
DIRECTV does not have direct or indirect beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) of any shares of the
Company's outstanding capital stock.

5. CERTAIN COVENANTS OF THE COMPANY AND DIRECTV

         5.1 Satisfaction of Conditions. Each party to this Agreement shall use
reasonable efforts to satisfy promptly all conditions precedent to the
obligations of the other party to consummate the transactions contemplated by
this Agreement.

         5.2 Negative Covenants of the Company. The Company shall not during the
period from the date of this Agreement and continuing until the Share Delivery
Date:

         (a) Dividends; Changes in Share Capital. The Company shall not and
shall not propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, except dividends by the
Company in the ordinary course, (ii) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of its
capital stock, or (iii) repurchase, redeem or otherwise acquire any shares of
its capital stock or any securities convertible into or exercisable for any
shares of its capital stock.

         (b) Issuance of Securities. The Company shall not issue, deliver or
sell, or authorize the issuance, delivery or sale of, any shares of its capital
stock of any class, any securities

                                       9
<PAGE>

convertible into or exercisable for, or any rights, warrants or options to
acquire, any shares or voting debt securities, or enter into any agreement with
respect to any of the foregoing, other than (i) the possible issuance of shares
of the Company's Class A Common Stock pursuant to the Films Transaction and (ii)
upon the exercise of stock options issued in the ordinary course prior to the
date hereof in accordance with the terms of the stock option plans of the
Company as in effect on the date of this Agreement.

         (c) Organizational Documents. Except to the extent required to comply
with its obligations hereunder, by law or by the rules and regulations of the
Nasdaq National Market, the Company shall not amend or propose to amend its
Organizational Documents.

         5.3 Affirmative Covenants of the Company. During the period from the
date of this Agreement and on or prior to the Share Delivery Date, the Company
shall execute and deliver and shall use its best efforts to cause the other
parties thereto to execute and deliver the Amended Stockholders Agreement.
Capitalized terms used in this Section 5.3 and not otherwise defined shall the
meanings ascribed to them in the Stockholders Agreement. The Amended
Stockholders Agreement shall include DIRECTV as a party thereto with the same
rights and obligations of a Minority Stockholder as currently set forth therein,
including the Tag Along Rights described in Section 3.5 thereof, the Demand
Registration Rights set forth in Section 4 thereof and the Piggy Back Rights set
forth in Section 4.2 thereof. DIRECTV shall not be entitled to nominate any
members to the Company's Board of Directors (the "Company Board"). The Amended
Stockholders Agreement shall include all conforming amendments necessary to
effectuate the rights granted to DIRECTV hereunder. The following specific
provisions shall be included in the Amended Stockholders Agreement:

         (a) Board Observer. For as long as DIRECTV beneficially owns at least
75% of the total shares of Class A Common Stock to be issued on the Share
Delivery Date (appropriately adjusted for stock splits or stock dividends or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization), DIRECTV shall have the right to designate a non-voting
observer to the Company Board ("DIRECTV Observer"), who is reasonably acceptable
to the Company Board, who shall have the right to notice of and attend all
Company Board meetings. The DIRECTV Observer shall be entitled to receive and
have full access to all information and materials provided to any of the members
of the Company Board (except where materials are provided only to a committee
that was appointed by the Company Board) at the same time as the Company Board
member(s) receive such materials subject to the following limitation: In the
event that the matter being considered by the Company Board directly concerns a
transaction with a domestic distributor of the Hallmark Channel, with a
distributor outside of the United States where DIRECTV, Inc. or an Affiliate has
operations or with an entity affiliated with DIRECTV, the Company Board may
exclude the DIRECTV Observer from such portion of the Company Board meeting and
redact such information and materials. However, if the Company issues any Equity
to any distributor of the Hallmark Channel, the Company shall give DIRECTV
written notice of such issuance not less than ten (10) business days prior to
such issuance and include therein the amount of Equity to be issued, the
obligations assumed by such distributor in exchange for the Equity, including,
without limitation, any obligations that are similar to those set forth on
Schedule 10.11 hereof, the obligations of the Company and its Affiliates in
connection with such Equity issuance, and the

                                       10
<PAGE>

Other Distributor Proportion. DIRECTV shall be and shall cause the DIRECTV
Observer to be obligated to hold in confidence any and all information received
in any Company Board meeting or otherwise in the DIRECTV Observer's capacity as
such, except to the extent such information is publicly disclosed by the
Company, provided that the DIRECTV Observer shall be entitled to report any and
all information to DIRECTV. DIRECTV shall not and DIRECTV shall ensure that the
DIRECTV Observer shall not use such information for any purpose other than for
DIRECTV's analysis of the Company's financial condition and operations and shall
comply with all limitations of the law, including securities laws, regarding the
use of such information.

         (b) Affiliate Transactions. The following agreements shall be
specifically excluded from the definition of Affiliate Transactions: (i) the
affiliation agreement between DIRECTV, Inc. and Crown Media U.S. dated as of
March 6, 2000 for the "Odyssey" Service; (ii) the Affiliation Agreement; (iii)
this Agreement and (iv) the undertakings set forth in the Side Letter, and, in
each case, any amendments and modifications thereto.

         (c) Equity Purchase Rights. If the Company grants any Person those
rights provided to Liberty Media Corporation, together with any successors of
Liberty Media Corporation or assignees of Liberty Media Corporation's rights
(collectively "Liberty"), pursuant to Section 3.6 of the Stockholders Agreement,
which rights permit Liberty to maintain a minimum equity interest in the Company
in the event the Company sells common stock for cash, then the Company shall
grant DIRECTV the same rights.

         5.4 Affirmative Covenants of DIRECTV. DIRECTV agrees to cause DIRECTV,
Inc. to execute and perform pursuant to the Affiliation Agreement and the Side
Letter.

         5.5 Material Obligations. The parties acknowledge that performance of
the covenants hereunder is a material obligation of this Agreement.

         5.6 Further Assurances. From and after the Closing, the Company shall
execute and deliver, or cause Crown Media U.S. to execute and deliver, and
DIRECTV shall execute and deliver, or cause DIRECTV, Inc. to execute and
deliver, any assignments or assurances and to take and do, in the name and on
behalf of such parties, as appropriate, any other actions and things reasonably
necessary to carry out the intention of this Agreement.

6. CONDITIONS TO THE ISSUANCE

         6.1 Conditions to the Obligations of the Company. The obligation of the
Company to consummate the transactions to be performed by it in connection with
the Closing is subject to the satisfaction of the conditions that:

         (a) DIRECTV shall have delivered to the Company the Par Consideration
by wire transfer or check at or prior to the Closing;

         (b) this Agreement and the Amended Stockholders Agreement shall have
been executed by DIRECTV and delivered at or prior to the Closing;

                                       11
<PAGE>

         (c) the Affiliation Agreement and the Side Letter shall have been
executed by DIRECTV, Inc. and delivered at or prior to the Closing;

         (d) the representations and warranties of DIRECTV as set forth in
Section 4 hereof shall be true and complete as of the Share Delivery Date;

         (e) DIRECTV shall have performed and complied in all material respects
with all obligations and covenants required to be performed or complied with by
it under this Agreement at or prior to the Share Delivery Date;

         (f) there shall be no litigation pending or threatened that, if
resolved in favor of the complainant, would prevent consummation of the
transaction or rescission of the consummation;

         (g) DIRECTV shall have provided to the Company an officer's
certificate, dated as of the Share Delivery Date, in form and substance as set
forth in Exhibit "D" attached hereto certifying that each of the foregoing is
true and complete as of the Share Delivery Date.

         The Company may waive in writing any condition specified in this
Section 6.1 if it executes a statement so stating at or prior to the Closing.

         6.2 Conditions to the Obligations of DIRECTV. The obligation of DIRECTV
to consummate the transactions to be performed by it in connection with the
Closing is subject to the satisfaction of the conditions that:

         (a) the Company shall have delivered the resolutions of the Company
Board authorizing execution of this Agreement (including the issuance of the
DIRECTV Shares), the Amended Stockholders Agreement, the Side Letter and the
Affiliation Agreement and the performance of the Company's obligations under
this Agreement, the Amended Stockholders Agreement and the Side Letter;

         (b) this Agreement, the Side Letter and the Amended Stockholders
Agreement shall have been executed by the Company and delivered at or prior to
the Closing;

         (c) the Affiliation Agreement shall have been executed by Crown Media
U.S. and delivered at or prior to the Closing;

         (d) the Amended Stockholders Agreement shall have been executed by all
other parties to the Stockholders Agreement and delivered at or prior to the
Closing;

         (e) the Company shall have delivered to DIRECTV the stock certificates
representing all of the DIRECTV Shares, free and clear of all Liens, at or prior
to the Closing;

         (f) the representations and warranties of the Company as set forth in
Section 3 hereof, shall be true and complete as of the Share Delivery Date;

         (g) there shall be no litigation pending or threatened that, if
resolved in favor of the complainant, would prevent consummation of the
transaction or rescission of the consummation;

                                       12
<PAGE>

         (h) the Company shall have given any notices to third parties,
including any Governmental Entity, the NASDAQ National Market or any other
exchange, and shall have obtained any third party consents necessary to
consummation of the transactions hereby;

         (i) the Company shall have performed and complied in all material
respects with all obligations and covenants required to be performed or complied
with by it under this Agreement at or prior to the Share Delivery Date;

         (j) the Company shall have provided to DIRECTV an officers'
certificate, dated as of the Share Delivery Date, in form and substance as set
forth in Exhibit "C" attached hereto, certifying that each of the foregoing is
true and complete as of the Share Delivery Date;

         (k) DIRECTV shall have received from Holland & Hart LLP, outside
counsel to the Company, an opinion in form and substance as set forth in Exhibit
"A-1" attached hereto, addressed to DIRECTV, and dated as of the Share Delivery
Date;

         (l) DIRECTV shall have received from Morris, Nichols, Arsht & Tunnell,
outside counsel to the Company, an opinion in form and substance as set forth in
Exhibit "A-2" attached hereto, addressed to DIRECTV, and dated as of the Share
Delivery Date; and

         (m) DIRECTV shall have received from the General Counsel to the
Company, Charles L. Stanford, Esq., an opinion in form and substance as set
forth in Exhibit "B" attached hereto, addressed to DIRECTV, and dated as of the
Share Delivery Date.

         DIRECTV may waive in writing any condition specified in this Section
6.2 if it executes a statement so stating at or prior to the Closing.

7. TERMINATION

         7.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing by mutual
written consent of the Company and DIRECTV. In the event of the termination of
this Agreement pursuant to this Section 7.1, all provisions of this Agreement,
other than Sections 10.11, 10.12 and 11, shall forthwith become null and void
and have no effect, without any liability on the part of any party hereto or its
respective directors or officers.

         7.2 Termination by DIRECTV. DIRECTV may terminate this Agreement in the
event the conditions set forth in 6.2 are not satisfied by the Share Delivery
Date unless such failure to satisfy a condition is a direct result of a breach
by DIRECTV, or otherwise waived by DIRECTV. If this Agreement is terminated
pursuant to this Section 7.2 as a result of the Company's failure to deliver the
DIRECTV Shares, then Sections 9, 10.11, 10.12 and 11 of this Agreement shall
remain in effect.

         7.3 Termination by the Company. The Company may terminate this
Agreement in the event the conditions set forth in Section 6.1 are not satisfied
on or prior to the Share Delivery Date unless such failure is a direct result of
a breach by the Company or otherwise waived by the Company. If this Agreement is
terminated pursuant to this Section 7.3, then Sections 9, 10.11, 10.12 and 11 of
this Agreement shall remain in effect. Notwithstanding anything herein to the

                                       13
<PAGE>

contrary, upon DIRECTV's launch of the service known as "The Hallmark Channel"
pursuant to the Affiliation Agreement, neither the Company nor Crown Media U.S.
shall have the rights pursuant to this Section 7.3 to terminate this Agreement
unless and until DIRECTV fails to comply with the conditions set forth in
Section 6.1 as of the Share Delivery Date and such failure to satisfy a
condition is not a direct result of an action by the Company.

         7.4 Survival. Nothing in this Section 7 shall, however, relieve any
party to this Agreement of liability for breach of this Agreement occurring
prior to such termination, or for breach of any provision of this Agreement
which specifically survives termination hereunder.

8. TRANSFER TAXES

         DIRECTV shall be responsible for the payment of all national, state,
local, municipal and other transfer, stamp, sales, use or other similar taxes
(and all recording or filing fees) resulting from the issuance of the DIRECTV
Shares pursuant to this Agreement.

9. INDEMNIFICATION

         9.1 Indemnification by DIRECTV. DIRECTV recognizes that the issuance of
the DIRECTV Shares is based upon representations, warranties and covenants
contained herein and DIRECTV agrees to indemnify the Company and its officers
and directors and to hold them harmless against any liability, costs or expenses
(including, without limitation, reasonable attorneys' fees) arising by reason of
or in connection with any misrepresentation or any breach of the
representations, warranties and covenants by, or of, DIRECTV herein.

         9.2 Indemnification by the Company. The Company recognizes that the
acceptance by DIRECTV of the DIRECTV Shares is based upon representations,
warranties and covenants contained herein and the Company agrees to indemnify
DIRECTV and its officers and directors and to hold them harmless against any
liability, costs or expenses (including, without limitation, reasonable
attorneys' fees) arising by reason of or in connection with any
misrepresentation or any breach of the representations, warranties and covenants
by, or of, the Company herein.

         9.3 Procedures for Indemnification; Third Party Claim.

         (a) If any third party shall notify any party to this Agreement (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against any other party to this
Agreement (the "Indemnifying Party") under this section 9, then the Indemnified
Party shall promptly give written notice ("Written Notice") to the Indemnifying
Party thereof in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party thereby is prejudiced.

         (b) The Indemnifying Party shall have the right to defend, or upon the
written request from the Indemnified Party, the Indemnifying Party shall be
required to defend at the cost of the Indemnifying Party and through counsel of
its own choosing (reasonably acceptable to the Indemnified Party), any Third
Party Claim set forth in a Written Notice giving rise to such Third

                                       14
<PAGE>

Party Claim for indemnification. In the event the Indemnifying Party undertakes
to defend any such Third Party Claim, it shall promptly (and in any event, no
later than fifteen (15) days after receipt of the Written Notice) notify the
Indemnified Party in writing of its intention to do so. If the Indemnifying
Party fails to notify the Indemnified Party of its intent to, or refuses after
receipt of the written request from the Indemnified Party to, undertake the
defense of such Third Party Claim, then the Indemnified Party may do so at the
expense of the Indemnifying Party, provided that such attorney's fees and costs
are reasonable. The parties shall fully cooperate in the defense of any Third
Party Claim. After the assumption of the defense by the Indemnifying Party, the
Indemnifying Party shall not be liable for any legal or other expenses
subsequently incurred by the Indemnified Party, in connection with such defense,
but the Indemnified Party may participate in such defense at its own expense. No
settlement of a Third Party Claim defended by the Indemnifying Party shall be
made without the prior written consent of the Indemnified Party, such consent
not to be unreasonably withheld. The Indemnifying Party shall not, except with
prior written consent of the Indemnified Party, consent to the entry of a
judgment or settlement which does not include as an unconditional term thereof,
the giving by the claimant or plaintiff to the Indemnified Party of an
unconditional release from all liability in respect of such Third Party Claim.

         (c) In the event any of the conditions in clause (b) above is or
becomes unsatisfied however, (i) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, the Third Party Claim in any manner it reasonably may deem appropriate (and
the Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (ii) subject to Section 9.3(b)
above, the Indemnifying Party will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim (including
reasonable attorney's fees and expenses), and (iii) subject to Section 9.3(b)
above, the Indemnifying Party will remain responsible for any liabilities, costs
and expenses the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim, which gives
rise to a right to indemnification pursuant to Section 9.1 or 9.2, as the case
may be, to the fullest extent provided in this Section 9.

         9.4 Limitations on Indemnity. The representations and warranties made
herein by the parties hereto shall survive the Closing for a period of 24 months
from the date hereof, and no party shall bring a claim or action with respect to
such representation or warranty at any time thereafter. This Section 9.4 shall
not limit any covenant or agreement of the parties hereto, which by its terms
contemplates performance after the Closing of this Agreement.

         9.5 Survival. Termination of this Agreement shall not affect the
continuing obligations of the Company and DIRECTV as indemnitors hereunder.

         9.6 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO
EVENT SHALL ANY PARTY BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES,
WHETHER FORESEEABLE OR NOT, OCCASIONED BY ANY FAILURE TO PERFORM OR THE BREACH
OF ANY OBLIGATION UNDER THIS AGREEMENT FOR ANY CAUSE WHATSOEVER, WHETHER BASED
ON NEGLIGENCE OR OTHERWISE.

                                       15
<PAGE>

10. MISCELLANEOUS

         10.1 Entire Agreement. This Agreement, together with the Side Letter,
the Affiliation Agreement and the Amended Stockholders Agreement, constitute the
entire agreement of the parties hereto with respect to the subject matter hereof
and thereof and supersede all prior agreements and undertakings, both written
and oral, with respect to the subject matter hereof and thereof. It is agreed
that neither party has entered into this Agreement in reliance upon any
representation, warranty or undertaking of the other party which is not
expressly set forth in this Agreement, the Side Letter, the Affiliation
Agreement, or the Amended Stockholders Agreement.

         10.2 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile) and signed by or on
behalf of the party giving it and shall be given by personal delivery,
first-class certified or registered mail, confirmed facsimile or nationally
recognized overnight express courier

if to the Company, to:           Crown Media Holdings, Inc.
                                 6430 S. Fiddlers Green Circle, Suite 500
                                 Greenwood Village, CO 80111
                                 Attention: Charles L. Stanford, General Counsel
                                 Fax: (303) 221-3779

if to DIRECTV, to:               DIRECTV Enterprises, Inc.
                                 2230 East Imperial Hwy
                                 El Segundo, CA  90245
                                 Attention: Senior Vice President
                                 Fax: (310) 535-5422
                                 cc:  General Counsel
                                 Fax: (310) 726-4991

or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, three hours after the time of dispatch to the facsimile number
specified in this Section 10.2 provided the appropriate confirmation is
received, or (ii) one business day after deposit with such overnight courier
service or three days after deposit of such registered or certified mail with
the U.S. Postal Service, in each case when sent to the address specified in this
Section 10.2.

                                       16
<PAGE>

         10.3 Amendments; No Waivers.

                  (a) Any provision of this Agreement may be amended or waived
prior to the Share Delivery Date if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by the Company and DIRECTV or
in the case of a waiver, by the party against whom the waiver is to be
effective.

                  (b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege.

         10.4 Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.

         10.5 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that, no party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the prior written consent of the other party hereto; provided, however, that the
parties may assign their rights and obligations under this Agreement, excluding
the Company's rights under the Side Letter, in whole or in part, (i) to an
Affiliated company or to a successor entity whether by sale of assets, merger or
otherwise; (ii) to a third party as part of preparing to go or going public or
as part of a merger, consolidation or sale of all substantially all of the
assets of the applicable party hereto or (iii) to a third party, provided the
applicable party hereto remains primarily liable for the performance of such
third party's obligations hereunder. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any person, other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies obligations or
liabilities under or by reason of this Agreement.

         10.6 Certain Interpretive Matters. Titles and headings to Sections
herein are inserted for convenience of reference only, and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.

         10.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without giving effect to
any provisions relating to the conflict of laws.

         10.8 Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one and the same instrument. This
Agreement shall be binding upon the faxing by each party of a signed signature
page thereof to the other parties. If such a faxing occurs, each party shall
also immediately post, by Federal Express or other nationally recognized
overnight express courier, a fully executed original counterpart of the
Agreement to the other parties.

         10.9 Severability. If any term, provision, covenant or restriction of
this Agreement is determined to be invalid, void or unenforceable, the remainder
of the terms, provisions,

                                       17
<PAGE>

covenants and restrictions of this Agreement will remain in full force and
effect and will in no way be affected, impaired or invalidated.

         10.10 Survival. Subject to Section 9.4 hereof, all representations,
warranties, indemnities, covenants (other than those set forth in Section 5.2
hereof) and agreements contained in or made pursuant to this Agreement or
contained in any certificate or other document delivered pursuant to this
Agreement, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of any party hereto, and shall survive
the issuance of the DIRECTV Shares and the consummation of the transactions
contemplated by this Agreement and the Amended Stockholders Agreement.

         10.11 Confidentiality. Each of the Company and DIRECTV shall treat as
confidential the terms of this Agreement and the related agreements, and all
confidential information provided by the other party which does not otherwise
become available to the other (other than pursuant to a breach of this Section
10.11), unless counsel for the Company or DIRECTV (as the case may be)
reasonably believes that disclosure thereof is required (i) by law (in which
event the disclosing party shall so notify the other party as promptly as
practicable (and, if possible, prior to making any disclosure) and shall seek
confidential treatment of such information), (ii) to comply with the most
favored nations' provisions contained in its contracts; provided that, any
disclosure of the terms of this Agreement, the Affiliation Agreement or the Side
Letter shall be limited to the terms set forth on Schedule 10.11 to this
Agreement and only to the extent necessary to comply with such most favored
nations provisions and without identifying DIRECTV or DIRECTV, Inc. as a party
thereto, (iii) as part of its normal reporting or review procedure to its
financial institutions, its parent company, its auditors and its attorneys, or
(iv) to the National Rural Telecommunications Cooperative (the "NRTC"),
potential investors, insurers and financing entities; provided that any third
party to which such information is disclosed shall agree to be bound by the
provisions of this Section 10.11, and, except with respect to the NRTC, each
party shall give the other party prior written notice of such disclosure.

         10.12 Public Announcements. Neither the Company nor DIRECTV shall make,
nor permit any entity which the Company or DIRECTV controls to make, any public
announcements in respect of this Agreement or the transactions contemplated
hereby or otherwise communicate with any news media, other than to provide the
announcement attached as Schedule 10.12 hereto. Notwithstanding the foregoing,
the parties shall be permitted to make such public and other statements as are
necessary for it to comply with applicable federal and state securities laws or
rules of any exchange to which the Company or DIRECTV or any Affiliated company
may be subject, provided that the other parties shall be advised and consulted
in advance of any such public disclosure or announcement addressing the
substance of this Agreement.

         11. DISPUTE RESOLUTION AND ARBITRATION.

         (a) Initial Dispute Resolution Procedures. Any dispute or disagreement
between the parties arising out of this Agreement shall be resolved according to
the following dispute resolution procedure: First, such dispute shall be
addressed to each party's project manager (or equivalent level manager) for
discussion and attempted resolution. If any such dispute cannot be resolved by
such project managers within five (5) business days from the date that either
party gives notice that such dispute or disagreement exists, then such dispute
shall be immediately

                                       18
<PAGE>

referred to the appropriate, respective vice presidents (or equivalent level
person) for discussion and attempted resolution.

         (b) Arbitration Procedures. If a dispute cannot be resolved to the
mutual satisfaction of the parties within five (5) business days (or such longer
period as may be mutually agreed upon) after the second-tier referral described
in Section 11(a), such dispute shall be referred to arbitration in Los Angeles,
California, before three arbitrators in accordance with the Commercial
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association, in effect on the date that notice of such dispute was originally
given. The three arbitrators shall be appointed as follows: Each party may
select one independent arbitrator and, thereafter these two shall select the
third and final independent arbitrator. If the two selected arbitrators cannot
agree upon the third arbitrator within five (5) days of their selection, then
the third and final arbitrator shall be selected by and according to the
Arbitration Rules. Once appointed, the arbitrators shall appoint a time and
place for a pre-hearing status conference not more than fourteen (14) days from
the date of their appointment, and shall appoint a time and place for a final
hearing not more than forty-five (45) days from the date of the status
conference. The final hearing shall conclude no later than thirty (30) days
after its commencement. The party that demands arbitration of the unresolved
dispute or disagreement shall specify in writing the matter to be submitted to
arbitration. The arbitrators shall render a single written decision setting
forth an award and provide a reasoned opinion in accordance with applicable law,
supporting their award, including detailed findings of fact and conclusions of
law. Any cash component of the award shall be payable in United States dollars
through a bank in the United States. Each party shall bear its own costs of
preparing for and presenting its case; and the cost of arbitration, including
the fees, and expenses of the arbitrators will be shared equally by the parties.

         (c) Enforcement. The arbitration award shall be final and binding upon
the parties and may be confirmed by the judgment of any court having appropriate
jurisdiction including, without limitation, California. In any such proceeding,
the court shall take into consideration any error of law on the part of the
arbitrators, in addition to all grounds provided by statute.

         12. Post-Closing Covenants.

                  (a) [*]

                  (b) Side Letter. Upon the consummation of the transactions
contemplated herein on or prior to the Share Delivery Date, DIRECTV, Inc. and
Crown Media U.S. shall, on such Share Delivery Date, enter into and commence
performance of their respective obligations under the Side Letter.

         13. Cross-Defaults. Notwithstanding anything to the contrary herein, in
the event there is a material breach of the Affiliation Agreement (subject to
the cure period and procedure set forth in Section 6(b)(i) of the Affiliation
Agreement) by DIRECTV, Inc. (the "DIRECTV Default"), then such DIRECTV Default
shall constitute a material breach by DIRECTV under Section 5.4 of this
Agreement. In such event, the determination of damages, if any, arising from the
DIRECTV Default may be based, among other things, upon the value of the DIRECTV
Shares provided by the Company and the value of the consideration provided by
Crown Media

                                       19
<PAGE>

U.S. in connection with the Affiliation Agreement, provided that other relevant
factors shall also be considered such as the nature and materiality of the
DIRECTV Default, the relative significance of the DIRECTV Default to the entire
Affiliation Agreement and provided that the amount of such damages is
commensurate with such factors. Notwithstanding anything to the contrary herein,
in no event shall the Company or its Affiliates have a direct claim or remedy
against the DIRECTV Shares or any of DIRECTV's rights under this Agreement or
the Amended Stockholders Agreement or hinder, impair or adversely affect such
rights to any extent whatsoever. In the event there is a material breach of this
Agreement by the Company (a "Company Default"), then such Company Default shall
constitute a material breach by Crown Media U.S. under the Affiliation
Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                       20
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

                                        CROWN MEDIA HOLDINGS, INC.

                                        By: /s/ Charles L. Stanford
                                            ------------------------------------
                                        Name: Charles L. Stanford
                                              ----------------------------------
                                        Title: Executive Vice President
                                               ---------------------------------

                                        DIRECTV ENTERPRISES, INC.

                                        By: /s/ Lawrence N. Chapman
                                            ------------------------------------
                                              Lawrence N. Chapman
                                              Executive Vice President

                                       21
<PAGE>
                                  EXHIBIT "A-1"

                     FORM OF OPINION OF HOLLAND & HART LLP,
                         OUTSIDE COUNSEL TO THE COMPANY

Ladies and Gentlemen:

         We have acted as one of the counsel for Crown Media Holdings, Inc., a
Delaware corporation (the "Company"), in connection with the issuance and sale
of 5,360,202 shares of the Company's Class A Common Stock, par value $0.01 per
share (the "DIRECTV Shares"), pursuant to the Stock Purchase Agreement (the
"Agreement"), dated as of August ___, 2001 between the Company and DIRECTV
Enterprises, Inc., a Delaware corporation (the "Purchaser"). We are rendering
this opinion at the request of the Company and pursuant to Section [6.2(k)] of
the Agreement. Capitalized terms used but not defined herein have the respective
meanings given to them in the Agreement.

         In connection with rendering the opinions set forth herein, we have
examined originals or copies of the following:

         a. The Agreement;

         b. The Amended Stockholders Agreement;

         c. The Company's Certificate of Incorporation and its bylaws, each as
amended to date;

         d. The "Material Agreements" identified on Schedule 1 hereto;

         e. A Certificate of Good Standing issued by the Secretary of State of
the State of Delaware, as of August __, 2001; and

         f. The proceedings of the Board of Directors and officers of the
Company taken in connection with the transactions contemplated by the Agreement.

         In addition, we have examined and relied upon the representations and
warranties as to factual matters contained in and made pursuant to the Agreement
by the various parties and originals or copies of such records, documents,
certificates, opinions, memoranda and other instruments as in our judgment are
necessary or appropriate to enable us to render the opinion expressed below.

         As to certain factual matters, we have relied upon a certificate
executed by an officer of the Company (the "Officer's Certificate"), a copy of
which is attached hereto as Exhibit A, and have not sought independently to
verify such matters.

                                      A-1
<PAGE>

         In rendering this opinion, we have assumed: the genuineness and
authenticity of all signatures on original documents; the authenticity of all
documents submitted to us as originals; the conformity to originals of all
documents submitted to us as copies; the accuracy, completeness and authenticity
of certificates of public officials; and the due authorization, execution and
delivery of all documents (except the due authorization, execution and delivery
by the Company of the Agreement and the Amended Stockholders Agreement), where
authorization, execution and delivery are prerequisites to the effectiveness of
such documents. We have also assumed (i) that all individuals executing and
delivering documents on behalf of the Purchaser had the legal capacity to so
execute and deliver; (ii) that Purchaser has received all documents Purchaser
was to receive under the Agreement and the Amended Stockholders Agreement; and
(iii) that each of the Agreement and the Amended Stockholders Agreement is an
obligation binding upon Purchaser. In rendering this opinion we have also
assumed that there are no extrinsic agreements or understandings among the
parties to the Agreement that would modify or interpret the terms of the
Agreement, the Amended Stockholders Agreement or the respective rights or
obligations of the parties thereunder.

         With regard to our opinion expressed in paragraph 4 below, we have
expressly relied in part upon Purchaser's representations and warranties in
Section 4.4 of the Agreement and have further relied solely upon the Officer's
Certificate with respect to the fact that neither the Company, nor any party
acting or working on its behalf, conducted or will conduct any general
solicitation or general advertising in connection with the offer, sale, or
issuance of the DIRECTV Shares.

         With respect to our opinion expressed in paragraph 7 below relating to
the absence of any pre-emptive rights, we have relied solely upon the Officer's
Certificate. We express no opinion, directly or indirectly, that the
consideration paid for the DIRECTV Shares is proper under the General
Corporation Law of the State of Delaware. We have assumed that such
consideration is proper under the General Corporation Law of the State of
Delaware. Accordingly, we have assumed that upon issuance, the DIRECTV Shares
shall be fully paid and non-assessable and we express no opinion thereon.

         Our opinion is expressed only with respect to the federal laws of the
United States of America (the "Federal Laws"), the laws of the State of Colorado
and the General Corporation Law of the State of Delaware. We express no opinion
as to whether the laws of any particular jurisdiction apply, and no opinion to
the extent that the laws of any jurisdiction other than those identified above
are applicable to the subject matter hereof. We are not rendering any opinion as
to compliance with any antifraud law, rule or regulation relating to securities,
or to the sale or issuance thereof.

         On the basis of the foregoing, in reliance thereon and with the
foregoing qualifications, we are of the opinion that:

         1. The Company has been duly incorporated and is validly existing in
good standing under the laws of the State of Delaware. The Company has the
requisite corporate power and corporate authority to own or lease and operate
its business and assets and to carry on its business as presently conducted.

                                      A-2
<PAGE>

         2. The Company has the requisite corporate power and authority to
execute on behalf of the Company and deliver the Agreement and the Amended
Stockholders Agreement and to perform its obligations contemplated thereby.

         3. The execution on behalf of the Company and delivery of each of the
Agreement and the Amended Stockholders Agreement by the Company and the
performance of its obligations thereunder have been duly authorized by all
necessary corporate actions of the Company.

         4. Assuming the accuracy of the representations and warranties of
Purchaser in the Agreement, except as set forth in Section 3.2 of the Agreement,
no consent, approval, order or authorization of, or registration, declaration or
filing is required by or with respect to the Company in connection with the
execution and delivery of each of the Agreement and the Amended Stockholders
Agreement by the Company or the performance of its obligations thereunder, by
(i) any Governmental entity, including the SEC and any state securities agency,
(ii) the Nasdaq National Market or any other exchange on which any securities of
the Company are trading, quoted or listed or (iii) any holder of equity or debt
securities of the Company.

         5. Each of the Agreement and the Amended Stockholders Agreement has
been duly and validly executed and delivered by the Company.

         6. Neither the execution and delivery of each of the Agreement and the
Amended Stockholders Agreement by the Company, nor the performance of its
obligations thereunder will (i) violate any provision of the Company's
Organizational Documents; (ii) contravene the General Corporation Law of the
State of Delaware or any Federal Laws that affect the Company; or (iii)
contravene, conflict with, or result in a breach or default (or give rise to a
right of termination) of any provision of any "Material Agreement" set forth on
Schedule 1 attached hereto.

         7. When issued in accordance with the Agreement, the DIRECTV Shares
will not be issued in violation of any preemptive rights.

         The opinions expressed herein are given as of the date hereof; we
expressly disavow any obligation to advise you with respect to future changes in
law or in our knowledge or in any event or change of condition occurring
subsequent to the date of this opinion.

         The opinions expressed herein are strictly limited to the matters
stated herein, and no other opinions may be implied. This opinion is provided as
a legal opinion only, effective as of the date hereof, and not as a guaranty or
warranty of the matters discussed herein.

         This opinion is intended solely for Purchaser's benefit and is not to
be made available to or be relied upon by any other person, firm, or entity
without our prior written consent.

                                        Very truly yours,

                                      A-3
<PAGE>

                                  EXHIBIT "A-2"

               FORM OF OPINION OF MORRIS, NICHOLS, ARSHT & TUNNEL,
                         OUTSIDE COUNSEL TO THE COMPANY

Ladies and Gentlemen:

                  You have requested our opinion as to certain matters of
Delaware law in connection with the proposed issuance by Crown Media Holdings,
Inc., a Delaware corporation (the "Company"), of 5,360,202 shares (the "Shares")
of its Class A Common Stock, par value $.01 per share (the "Class A Stock"), to
DIRECTV Enterprises, Inc., a Delaware corporation ("DIRECTV"), pursuant to a
Stock Purchase Agreement (the "Stock Purchase Agreement"). In connection with
your request, the Company has provided to us and we have reviewed: (i) the Stock
Purchase Agreement, excluding the schedules or exhibits thereto except Schedule
1 ("Schedule 1"); (ii) the Affiliation Agreement between Crown Media United
States LLC, a Delaware limited liability company of which the Company is the
sole voting and managing member ("Crown LLC") and DIRECTV, Inc. ("Sub"), a
Delaware corporation and wholly-owned subsidiary of DIRECTV, dated as of
________; (iii) the Second Amended and Restated Stockholders Agreement by and
among Hallmark Entertainment, Inc., Liberty Media Corporation, Liberty Crown,
Inc., VISN Management Corporation, JP Morgan Partners (BHCA), L.P., DIRECTV and
the Company, dated as of August __, 2001 (the "Stockholders Agreement" and,
together with the Stock Purchase Agreement, the "Agreements"); (iv) resolutions
adopted by the board of directors of the Company (the "Board") in connection
with the Stock Purchase Agreement (the "Resolutions") and (v) the certificate of
incorporation and bylaws of the Company, each as amended to date. We have not
reviewed any other documents in connection with your request and have assumed
that there are no such documents that are contrary to or inconsistent with the
opinions set forth herein.

                  DIRECTV will purchase the Shares for $53,602.02 in cash (the
"Consideration") pursuant to the Stock Purchase Agreement and, in addition, Sub
and Crown LLC will execute the Affiliation Agreement and Sub will make the
undertakings set forth in Schedule 1. In authorizing the sale of the Shares, the
Stock Purchase Agreement and the Affiliation Agreement, the Board stated in the
Resolutions that, to induce DIRECTV to cause Sub to enter into the Affiliation
Agreement and Schedule 1, it was in the best interests of the Company to sell
the Shares to DIRECTV for a purchase price equal to their aggregate par value,
recognizing the additional benefit to the Company as a result of the Affiliation
Agreement.

                  For purposes of this opinion, we have assumed that each of the
Company and DIRECTV is duly organized, validly existing and in good standing
under the laws of Delaware; that the issuance of the Shares has been duly
authorized by all necessary corporate action; that the Company will have a
sufficient number of shares of Class A Stock authorized by its certificate of
incorporation that have not been issued, subscribed for, or otherwise committed
to be issued, in order to permit the Company to issue the Shares pursuant to the
terms of the Stock Purchase Agreement; that each party to the Agreements has the
corporate power to execute,

                                      A-4
<PAGE>

deliver and perform its obligations under the Agreements; that the Agreements
have been duly authorized, executed and delivered by each party thereto; that
each of the Agreements constitutes the legal, valid and binding obligation of
each of the parties thereto (other than the Company) enforceable against each
such party (other than the Company) in accordance with its terms; that the
restrictions on transfer of the shares of Class A Stock and Class B Common
Stock, par value $.01 per share, of the Company (the "Class B Stock") set forth
in the Stockholders Agreement are reasonable in relation to a valid corporate
purpose of the Company; and that the restrictions on the transfer of the shares
of Class A Stock and Class B Stock set forth in the Stockholders Agreement will
be noted conspicuously on the certificates representing such shares. We express
no opinion with respect to the Delaware Securities Act, 6 Delaware Code Section
7301 et seq., or any rules or regulations promulgated thereunder, or to any
agreements, exhibits, schedules or other documents referred to or incorporated
by reference in the Agreements other than the Agreements.

                  Based upon and subject to the foregoing and to the
qualifications set forth below, and limited in all respects to matters of
Delaware law, it is our opinion that:

                  1. Assuming that the Shares are otherwise validly issued, the
Consideration is valid consideration under Section 152 of the Delaware General
Corporation Law and Article IX, Section 3 of the Constitution of the State of
Delaware, and, upon receipt of the Consideration by the Company, the Shares
shall be deemed fully paid and nonassessable stock.

                  2. Each of the Agreements constitutes the legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms, except as such enforceability may be limited by: (i) bankruptcy,
insolvency, moratorium, fraudulent conveyance, receivership and other laws
affecting the rights and remedies of creditors generally; (ii) the application
of equitable principles (whether in a proceeding at law, in equity or
otherwise); and (iii) standards of good faith, fair dealing, course of dealing,
materiality and reasonableness that may be applied by a court to the exercise of
rights and remedies generally.

                  Our opinion in paragraph 2 above is subject to the following
qualifications:

                  a. We express no opinion as to the Company's obligations with
respect to indemnification and contribution, except to the extent permitted by
applicable law, or with respect to the enforceability of any purported waiver or
consent granted by the Company pursuant to the Agreements except to the extent
the Company may so waive or consent and has effectively so waived or consented
in accordance with applicable law.

                  b. We express no opinion with respect to the last sentence of
Section 11(c) of the Stock Purchase Agreement.

                  c. We express no opinion with respect to the last sentence of
Section 2.1, Section 2.4 or the second sentence of Section 6.9 of the
Stockholders Agreement.

                  d. We express no opinion with respect to any provision of the
Agreements that purports to provide that the law of a particular state will
govern such document insofar as the

                                      A-5
<PAGE>

application of such law would be contrary to a fundamental policy of a
jurisdiction with a materially greater interest than the chosen jurisdiction in
the determination of a particular issue, the law of which jurisdiction would be
the applicable law in the absence of an effective choice of law.

                  e. We express no opinion as to the enforceability of those
provisions of the Stockholders Agreement that designate a particular forum for
any action or proceeding arising out of the Stockholders Agreement to the extent
that such provisions are unreasonable at the time of litigation.

                  This opinion speaks only as of the date hereof and is based on
our understandings and assumptions as to present facts, and on the application
of Delaware law on the date hereof, and we undertake no obligation to update or
supplement this opinion after the date hereof for the benefit of any person or
entity with respect to any facts or circumstances that may hereafter come to our
attention or any changes in facts or law that may hereafter occur or take
effect. This opinion is intended solely for your benefit in connection with the
transactions referenced herein and may not be relied upon by any other person or
entity, or by you for any other purpose, without our prior written consent.

                                            Very truly yours,

                                      A-6
<PAGE>
                                   EXHIBIT "B"

                  FORM OF OPINION OF CHARLES L. STANFORD, ESQ.,
                         GENERAL COUNSEL OF THE COMPANY

Ladies and Gentlemen:

         As General Counsel for Crown Media Holdings, Inc., a Delaware
corporation (the "Company"), I am rendering this opinion in connection with the
issuance and sale of 5,360,202 shares of the Company's Class A Common Stock, par
value $0.01 per share (the "DIRECTV Shares"), pursuant to the Stock Purchase
Agreement (the "Agreement"), dated as of August ___, 2001 between the Company
and DIRECTV Enterprises, Inc., a Delaware corporation (the "Purchaser").
Capitalized terms used but not defined herein have the respective meanings given
to them in the Agreement.

         My opinion is expressed only with respect to the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware.

         On the basis of the foregoing qualifications, I am of the opinion that:

         1. As at the date hereof, the authorized capital stock of the Company
consists of (i) 200,000,000 shares of Class A Common Stock, $0.01 par value per
share, of which, as at August 17, 2001, 34,799,370 shares are issued and
outstanding, 10,000,000 have been reserved for issuance upon the conversion of
options under the Amended and Restated Crown Media Holdings, Inc. 2000 Long Term
Incentive Plan and 30,670,422 have been reserved for issuance upon conversion of
Class B Common Stock; (ii) 120,000,000 shares of Class B Common Stock, $0.01 par
value per share, of which 30,670,422 are issued and outstanding; and (iii)
10,000,000 shares of Preferred Stock, $0.01 par value per share, none of which
are issued and outstanding.

         2. All issued and outstanding shares of Class A Common Stock and Class
B Common Stock of the Company are duly authorized, validly issued, fully paid
and non-assessable, and, to my knowledge, no class of the capital stock of the
Company is entitled to preemptive rights.

         3. Neither the execution and delivery of the Agreement and the Amended
Stockholders Agreement by the Company, nor performance of its obligations
thereunder will contravene, conflict with, or result in a breach or default (or
give rise to a right of termination) of any provision of any license, agreement
or instrument to which the Company or an Affiliate is a party which would have a
material adverse effect on the business, financial condition or prospects of the
Company.

         4. Other than as set forth in Section 3.3(a) of the Agreement and
Section 3.6 of the Stockholders Agreement, there are no authorized, issued or
outstanding (i) securities of the Company convertible into or exchangeable for
equity securities of the Company, (ii) agreements, commitments, arrangements,
warrants, options or other rights to acquire from the Company, or other
obligations or undertakings of any kind of the Company, to issue any capital
stock or securities convertible into or exchangeable for equity securities of
the Company or to issue,

                                      B-1
<PAGE>

grant, extend or enter into any such agreement, commitment or arrangement,
warrant, option, or other rights or undertaking (other than commitments pursuant
to the Films Transaction and obligations pursuant to any "most favored nations"
clause contained in any distribution agreement of Crown Media U.S.), or (iii)
bonds, debentures, notes or other obligations or securities of the Company, the
holders of which have the right to vote with the stockholders of the Company, on
any matter submitted for the vote of the Company stockholders.

         5. There are no outstanding obligations of the Company to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company.

         6. Other than the Stockholders Agreement, there is no voting trust or
other agreement or understanding to which the Company is a party or is bound
with respect to the voting of the capital stock or other voting securities of
the Company.

         7. There is no litigation pending or, to the best of my knowledge,
threatened that, if resolved in favor of the complainant, would prevent
consummation of the transactions contemplated in the Agreement or rescission of
the consummation.

                                      B-2
<PAGE>
                                   EXHIBIT "C"

                          FORM OF OFFICERS' CERTIFICATE

         We, Charles L. Stanford, Esq. and William J. Aliber, the duly elected,
qualified and acting Executive Vice President and General Counsel and Chief
Financial Officer, respectively, of Crown Media Holdings, Inc. (the "Company"),
pursuant to Section 6.2 of that certain Stock Purchase Agreement, by and between
the Company and DIRECTV Enterprises, Inc., do hereby certify on behalf of the
Company that:

         1. the representations and warranties of the Company as set forth in
Section 3 of the Stock Purchase Agreement are true and complete at and as of the
date hereof; and

         2. the Company has performed and complied with in all material respects
all obligations and covenants required to be performed or complied with by it
under the Stock Purchase Agreement on or prior to the date hereof.

         IN WITNESS WHEREOF, we have executed this Officers' Certificate as of
___________________, 2001.

                                  CROWN MEDIA HOLDINGS, INC.

                                  By:
                                      ------------------------------------------
                                        Charles L. Stanford
                                        Executive President and General Counsel

                                  By:
                                      ------------------------------------------
                                        William J. Aliber
                                        Chief Financial Officer

                                      C-1
<PAGE>
                                   EXHIBIT "D"

                          FORM OF OFFICER'S CERTIFICATE

         I, Robert M. Hall and Robert L. Meyers, the duly elected, qualified and
acting Senior Vice President and General Counsel and Executive Vice President
and Chief Financial Officer, respectively, of DIRECTV Enterprises, Inc.
("DIRECTV"), pursuant to Section 6.1 of that certain Stock Purchase Agreement,
by and between DIRECTV and Crown Media Holdings, Inc., do hereby certify on
behalf of DIRECTV that:

         1. the representations and warranties of DIRECTV as set forth in
Section 4 of the Stock Purchase Agreement are true and complete at and as of the
date hereof; and

         2. DIRECTV has performed and complied with in all material respects all
obligations and covenants required to be performed or complied with by it under
the Stock Purchase Agreement on or prior to the date hereof.

         IN WITNESS WHEREOF, I have executed this Officer's Certificate as of
___________________, 2001.

                         DIRECTV ENTERPRISES, INC.

                         By:
                            ----------------------------------------------------
                            Robert M. Hall
                            Senior Vice President and General Counsel

                         By:
                            ----------------------------------------------------
                            Robert L. Meyers
                            Executive Vice President and Chief Financial Officer

                                      D-1
<PAGE>

                                   SCHEDULE 1

                                 August _, 2001

Crown Media Holdings, Inc.
6430 S. Fiddlers Green Circle
Suite 500
Englewood, CO 80111

Attention:  Charles Stanford, General Counsel

         Re:  Side Letter to Stock Purchase Agreement

Dear Gentlemen:

         Crown Media Holdings, Inc. (the "Company") and DIRECTV, Inc.
("DIRECTV") hereby agree to the following:

         1. DIRECTV and the Company shall negotiate in good faith an agreement
for the pay-per-view distribution of up to ten (10) motion pictures or
mini-series per year ("Crown Pictures").

         2. When required by law or regulation to add a Public Interest
Obligation ("PIO") service, consistent with the applicable regulations of the
Federal Communications Commission ("FCC"), DIRECTV shall, given the Company's
commitments to the National Interfaith Coalition ("NIC"), consider in good faith
the distribution of NIC's PIO service tentatively called "The Faith and Values
Network" on substantially similar terms pursuant to which DIRECTV distributes
other similar PIO services, provided that: (x) DIRECTV shall use reasonable
efforts to [*]; (y) DIRECTV shall have no obligation whatsoever under this
Section 2 if any action contemplated under said Section conflicts with any
applicable law, including, without limitation, any rules or regulations of the
FCC; and (z) NIC's proposed PIO service and the programming contained therein
qualify under FCC's PIO rules and regulations for PIO carriage by DIRECTV.
DIRECTV anticipates that it will add additional PIO service(s) in December 2002.
For purposes of this provision, "reasonable" shall include [*].

         3. If the Hallmark Channel contains and maintains over 85% Spanish
secondary audio for program (as opposed to promotional and advertising) content,
DIRECTV. shall carry the Hallmark Channel on DIRECTV's "PARA TODOS" platform in
the "Option Especial"

<PAGE>

package (or successor package) for license fees (per PARA TODOS subscriber) that
equal the amount of the License Fees payable under Section 2(b) of the
Affiliation Agreement for DBS Satellite Exhibition of Cable Network Programming
dated as of March 6, 2000 between DIRECTV and the Company for the carriage of
the Odyssey Channel (the "Odyssey Affiliation Agreement') (i.e. the rates for
the first, second, third, etc. year (if applicable) of carriage of the Hallmark
Channel on the PARA TODOS platform shall be the same as the first, second,
third, etc. year rates under the Odyssey Affiliation Agreement). All other terms
shall be substantially similar to the terms set forth in the Odyssey Affiliation
Agreement, provided that the parties shall mutually agree on the term of said
agreement.

         4. The parties shall negotiate in good faith an agreement regarding
DIRECTV's carriage of the Company's interactive application known as "V-Cards",
subject to the technical feasibility of the interactive application and the
parties' negotiation of acceptable business terms reflecting an agreed business
model and prevailing market conditions. As part of such discussion, the parties
shall assign appropriate personnel to determine the technical feasibility and
requirements associated with deploying the V-Card service using DIRECTV's
advanced settop receivers. It is anticipated that the initial version of the
V-Card service shall utilize Company-supplied and produced video objects and
template messages. Subsequent versions will offer users, to the extent
technically feasible and commercially practical, an increased ability to
customize and personalize their V-Cards. As part of their service relationship,
the parties agree to discuss processes that will allow DIRECTV customers to send
V-Cards to other V-Card enabled DIRECTV subscribers as well as V-Card users
outside the DIRECTV system. The parties also agree to discuss the deployment of
other Company interactive applications over the DIRECTV system such as "Crayola
Kids" and the Company's Video-on-Demand service.

         5. Consistent with and limited by its fiduciary responsibilities to the
shareholders of XM Satellite Radio, Inc. ("XM Radio"), and recognizing that
DIRECTV does not control XM Radio, DIRECTV shall undertake in good faith to
induce XM Radio to negotiate with Company for the distribution of an audio
service owned by the Company or a subsidiary.

         6. The parties' good faith obligations to negotiate an agreement as set
forth in items 1 and 4 above shall expire on December 31, 2002. The parties'
good faith obligations as set forth in item 2 and the parties' good faith
obligations as set forth in item 5 above shall expire on December 31, 2003, and
the parties' obligations set forth in item 3 above shall expire on December 31,
2003, provided that, as to items 2 and 4, DIRECTV and NIC have not reached an
agreement as to item 2 and/or the Company and DIRECTV have not reached an
agreement as to item 4.

         7. This Side Letter shall be governed by and construed in accordance
with the laws of the State of California, without giving effect to any
provisions relating to conflict of laws.

                                       2
<PAGE>

         8. Provided that the parties have acted in good faith, the failure by
the parties to reach an agreement in connection with items 1, 2, 4 and 5 above
or to reach an agreement as to the term of the agreement referenced in item 3
above shall not constitute a breach hereunder or under the Stock Purchase
Agreement.

                                        Sincerely,

                                        DIRECTV, Inc.

                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

AGREED TO AND ACCEPTED BY:

CROWN MEDIA HOLDINGS, INC.

By:
    ---------------------------
    Name:
          ---------------------
    Title:
           --------------------

                                       3
<PAGE>

                                  Schedule 3.4

                              Material Liabilities

During the month of July 2001, Crown Media Holdings, Inc. borrowed an additional
$31.0 million from HC Crown Corporation, pursuant to its $150 million Promissory
Note.

                                       4
<PAGE>

                                  Schedule 3.9

                 Material Agreements, Licenses and Instruments*

1.       Contribution Agreement, dated as of January 27, 2000, by and among
         Hallmark Entertainment, Inc., Crown Media, Inc. (now known as Crown
         Media International, Inc.), Liberty Media Corporation, Vision Group
         Incorporated, VISN Management Corp., National Interfaith Cable
         Coalition, Inc., Chase Equity Associates, LP (now known as J.P. Morgan
         Partners (BHCA), L.P.) and Crown Media Holdings, Inc.

2.       Stockholders Agreement dated as of March 14, 2001.

3.       Amended and Restated Crown Media Holdings, Inc. 2000 Long Term
         Incentive Plan.

4.       $20,000,000 Promissory note, dated as of November 19, 1999, of Crown
         Media, Inc. (now known as Crown Media International, Inc.) to HC Crown
         Corporation.

5.       $10,000,000 Promissory Note, dated February 23, 2000, of Crown Media,
         Inc. (now known as Crown Media International, Inc.) to HC Crown
         Corporation.

6.       Amendment to $10,000,000 Promissory Note, dated April 14, 2000, between
         Crown Media, Inc. (now known as Crown Media International, Inc.) and HC
         Crown Corporation.

7.       $150,000,000 Promissory Note, dated February 12, 2001, of Crown Media
         Holdings to HC Crown Corporation.

8.       $150,000,000 Irrevocable Standby Letter of Credit, dated February 12,
         2001, of Crown Media Holdings to Bank of America, N.A.

9.       $50,000,000 Promissory Note, dated July 10, 2001, of Crown Media
         Holdings to HC Crown Corporation.

10.      Amendment No. 1, effective as of June 30, 2001, to the Promissory Note,
         dated February 12, 2001, made by Crown Media Holdings, Inc. in favor of
         HC Crown Corporation.

11.      Purchase and Sale Agreement, dated as of April 10, 2001, by and between
         Crown Media Holdings, Inc. and Hallmark Entertainment Distribution,
         LLC.

12.      Letter Agreement between Chase Manhattan Bank and Hallmark India
         Private Limited dated as of August 23, 1999.

13.      Contract for a Combined Uplink and Space Segment Service dated as of
         December 17, 1999 by and between British Telecommunications PLC and
         Hallmark Entertainment Networks (now known as Crown Media
         International, Inc.).

*        Does not include corporate organizational documents of Crown Media
         Holdings, Inc. or any of its subsidiaries.

                                       5
<PAGE>

                                 Schedule 10.11

[*]

                                       6
<PAGE>

                                 Schedule 10.12

                                  Press Release

                  CROWN MEDIA SIGNS NEW AGREEMENT WITH DIRECTV,
               INC. INCREASING HALLMARK CHANNEL U.S. DISTRIBUTION
                            TO 40 MILLION SUBSCRIBERS

GREENWOOD VILLAGE, COLO. AND EL SEGUNDO, CA - AUGUST ___, 2001 - Crown Media
Holdings, Inc. (Nasdaq: CRWN) ("Crown Media" or the "Company") and DIRECTV, Inc.
today announced that they have entered into a strategic relationship under which
the Hallmark Channel U.S. will be repositioned to DIRECTV's TOTAL CHOICE(R)
Package. With this repositioning, the total distribution of the Hallmark Channel
in the United States will be expanded to approximately 40 million subscribers by
the end of September, 2001. In addition to this agreement for expanded
distribution, the two companies will explore the distribution of additional
programming services, new interactive broadband applications and pay-per-view
distribution of programs from the film library to be acquired by Crown Media and
additional programs of Hallmark Entertainment. As part of this relationship,
DIRECTV will receive approximately 5.4 million shares of Crown Media Class A
Common Stock, representing 4.7% of the fully diluted equity of Crown Media after
closing of the pending films transaction with Hallmark Entertainment
Distribution.

Margaret Loesch, President and CEO of Crown Media United States, LLC, commented,
"This agreement provides the Hallmark Channel U.S. with an increased level of
coverage across the country, expanding our distribution to approximately 40
million subscribers by the end of September, 2001. With the additional exposure
to viewers, we hope to further increase the ratings for our valued programming.
And the combination of increased distribution and increased ratings should help
us attract an even greater number of the leading advertisers to the channel."

As part of the collaboration between DIRECTV and Crown Media, DIRECTV will work
with Crown Media and Hallmark Entertainment, Inc., to explore the feasibility of
the pay-per-view distribution of longform titles, as well as the development of
new interactive applications, including an application known as "V Greetings."
Discussions will also be held with Binney & Smith to explore possible
opportunities involving the Crayola brand. Binney & Smith is owned by Hallmark
Cards, Inc.

"We have stated on numerous occasions that the success of our business is
dependent on our efforts in three strategic areas - brand, content and
distribution," stated David Evans, President and CEO of Crown Media Holdings.
"On the brand and content front, we've successfully completed the global
rebranding of the Hallmark Channel and are in the process of finalizing the
acquisition of over 700 titles from the award-winning Hallmark Entertainment
library. Now with this agreement, we are able to advance our goals on the
distribution front, putting the Hallmark Channel U.S. on par with some of the
most recognized networks on television today. With a recognized brand name,
high-quality programming and a growing audience, we are poised to

                                       7
<PAGE>

become a leader in the television programming industry and are pleased to add
DIRECTV to the impressive list of strategic partners with whom Crown Media is
fortunate to be allied."

"DIRECTV customers will benefit from the added value and enhancements that the
Hallmark Channel brings to its network," said Roxanne Austin, President and
Chief Operating Officer, DIRECTV, Inc. "Our customers have come to expect
compelling programming that enhances their viewing experience. We look forward
to expanding our relationship with a respected leader in the programming
community that provides innovative, quality entertainment to our customers."

Crown Media has filed a Current Report on Form 8-K with the SEC containing
additional information regarding this transaction.

ABOUT DIRECTV INC.

DIRECTV is the nation's leading digital satellite television service provider
with more than 10 million customers. DIRECTV and the Cyclone Design logo are
registered trademarks of DIRECTV, Inc., a unit of Hughes Electronics
Corporation. HUGHES is the world's leading provider of digital television
entertainment, and satellite and wireless systems and services. The earnings of
HUGHES, a unit of General Motors Corporation, are used to calculate the earnings
per share attributable to the General Motors Class H common stock (NYSE: GMH).
Visit DIRECTV on the World Wide Web at DIRECTV.com.

ABOUT CROWN MEDIA HOLDINGS, INC.

Crown Media Holdings, Inc. owns and operates pay television channels dedicated
to high quality, broad appeal, entertainment programming. The company currently
operates and distributes the Hallmark Channel in the U.S. and the Hallmark
Channel in more than 100 international markets. The combined channels have more
than 73 million subscribers worldwide. Significant investors in Crown Media
Holdings include Hallmark Entertainment, Inc., a subsidiary of Hallmark Cards,
Inc., Liberty Media Corp., DIRECTV, Inc., VISN Management Corp., a for-profit
subsidiary of the National Interfaith Cable Coalition, and J. P. Morgan Partners
(BHCA), L. P.

FORWARD-LOOKING STATEMENTS

Statements contained in this press release may contain forward-looking
statements as contemplated by the 1995 Private Securities Litigation Reform Act
that are based on management's current expectations, estimates and projections.
Words such as "expects," "anticipates," "intends," "plans," "believes,"
"estimates," variations of such words and similar expressions are intended to
identify such forward-looking statements. Forward-looking statements are subject
to risks and uncertainties, which could cause actual results to differ
materially from those projected or implied in the forward-looking statements.
Such risks and uncertainties include: competition for distribution of channels,
viewers, advertisers, and the acquisition of programming; fluctuations in the
availability of programming; fluctuations in demand for the programming Crown
Media airs on its channels; and other risks detailed in the

                                       8
<PAGE>

Company's filings with the Securities and Exchange Commission, including the
Risk Factors stated in the Company's 10-K Report for the year ended December 31,
2000 and 10-Q Report for the quarter ended June 30, 2001. Crown Media Holdings
is not undertaking any obligation to release publicly any updates to any forward
looking statements to reflect events or circumstances after the date of this
release or to reflect the occurrence of unanticipated events.

FOR ADDITIONAL INFORMATION AT CROWN MEDIA, PLEASE CONTACT:
INVESTOR RELATIONS:                            MEDIA:
Mary Ellen Adipietro                           Les Eisner
Lippert/Heilshorn & Associates                 The Lippin Group/LA
212-838-3777                                   323-965-1990
madipietro@lhai.com                            leisner@lippingroup.com

Karen Pisciotta                                Don Ciaramella
Lippert/Heilshorn & Associates                 The Lippin Group/NY
212-838-3777                                   212-986-7080
kpisciotta@lhai.com                            don@lippingroup.com

                                               Elissa Grabowski
                                               Lippert/Heilshorn & Associates
                                               212-838-3777
                                               egrabowski@lhai.com

FOR ADDITIONAL INFORMATION AT THE HALLMARK CHANNEL, PLEASE CONTACT:
Mark Kern
The Hallmark Channel
818-755-2626
MarkKern@hallmarkchannel.com

FOR ADDITIONAL INFORMATION AT DIRECTV, PLEASE CONTACT:
DIRECTV, Inc.
Gina Magee
310-726-4654

                                       9<PAGE>
                                                                  EXHIBIT 10.7.2

                              AFFILIATION AGREEMENT
                          FOR DBS SATELLITE EXHIBITION
                          OF CABLE NETWORK PROGRAMMING

                                  DIRECTV, INC.

                                       and

                         CROWN MEDIA UNITED STATES, LLC
                  (formerly known as ODYSSEY HOLDINGS, L.L.C.)

[*] Portion omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

<PAGE>

                              AFFILIATION AGREEMENT

                          FOR DBS SATELLITE EXHIBITION

                          OF CABLE NETWORK PROGRAMMING

         AGREEMENT, made as of August 20, 2001, by and between Crown Media
United States, LLC, a Delaware limited liability company ("Programmer"), and
DIRECTV, INC., a California corporation ("Affiliate").

         WHEREAS:

         A. Affiliate has established a direct broadcast service ("DBS")
satellite-based television system in North America;

         B. Affiliate desires to obtain the rights to distribute the "Hallmark
Channel" (the "Service," as defined in Section 1(b) below) via the DBS
Distribution System (as defined in Section 1(a) below) in the United States, its
territories and possessions, including Puerto Rico (the "Territory");

         C. Affiliate is a party to that certain DBS Distribution Agreement,
dated April 10, 1992, as amended, with the National Rural Telecommunications
Cooperative ("NRTC") for the distribution to subscribers in certain counties and
zip codes in the United States of programming via the DBS Distribution System;
and

         D. DIRECTV Enterprises, Inc. ("Enterprises"), an affiliate of
Affiliate, is a party to that certain Stock Purchase Agreement, dated August 20,
2001, ("Stock Purchase Agreement") with Crown Media Holdings, Inc. ("Crown
Holdings") pursuant to which Enterprises has received a stock interest in Crown
Holdings in connection with: Enterprises' payment of certain cash consideration
to Crown Holdings; Affiliate's entering into this Affiliation Agreement; and the
agreement of Enterprises and Affiliate to certain other undertakings.

         NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:

         1. Grant of Rights.

                  (a) Distribution; Certain Definitions. Programmer hereby
grants to Affiliate (which as used for all purposes in this Agreement shall mean
DIRECTV, (which shall include its designee, the NRTC and/or its members) the
nonexclusive right to distribute the Service in the Territory via the DBS
Distribution System to DIRECTV Subscribers via televisions, personal computers
or other authorized reception devices and platforms when such computer, devices
and platforms are used as television monitors during the Term (as defined in
Section 6(a) below) hereof, and Affiliate shall distribute the Service subject
to the

<PAGE>

terms and conditions hereof, which distribution obligation constitutes an
inducement for Crown Holdings to enter into the Stock Purchase Agreement and
shall be regarded as if it were a portion of the consideration under the Stock
Purchase Agreement. The term "DBS Distribution System" shall mean the
distribution system for video and other programming services whereby the
programming satellite signal or feed is received from the programmers'
transponder sources by a DIRECTV turnaround earth-station facility which
compresses and processes the signal or feed and then uplinks it at one of the
DIRECTV Frequencies on a DBS communications satellite (a "DBS Satellite") for
transmission to DIRECTV Subscribers. "DIRECTV Frequencies" shall mean the DBS
operating frequencies associated with an orbital location or locations, for
which Affiliate or an Affiliated Company (as defined in Section 8(a) below) is
the Federal Communications Commission ("FCC")-authorized permittee. "DIRECTV
Subscribers" shall mean those customers (both residential and non-residential)
authorized by Affiliate to receive one or more programming services via the DBS
Distribution System.

                  (b) The Service. The "Service" shall mean and consist of the
national feed (or, if Programmer uses multiple feeds for the Service, such other
of such multiple feeds designated by Affiliate) in the Territory of the
programming service commonly known as the "Hallmark Channel," which shall
consist of programming offering a diverse mix of family-friendly programming,
including classic movies, original programming series and/or specials, dramas,
comedies, programming targeted to young persons, entertainment series and/or
specials, docu-drama-type programming and inspirational programming. The
programming schedule, as of the date that the Service Rebranding commences (the
"Service Rebranding Commencement Date"), is attached hereto as Exhibit A and
incorporated herein by reference. The Service shall be presented on a 24-hour
per day, 7 days a week schedule. Commencing on January 1, 2002 and every six (6)
months thereafter for the remainder of the Term, Programmer shall provide
Affiliate with the current programming schedule for the Service. The selection,
rescheduling, substitution and withdrawal of any program or portion thereof
contained in the Service shall remain within the sole discretion and control of
Programmer, provided that Programmer shall comply with the requirements set
forth in Section 6(c)(i) below. The Service shall be delivered to DIRECTV in its
entirety, meaning that the programming on the Service, as received by any
Service Subscriber at a given point in time, shall be the same as the
programming received by all other subscribers to the Service at such point in
time, provided that Programmer may transmit multiple feeds of the Service for
different time zones. All rights and title in and to the entire contents of the
Service, including, but not limited to, films and recordings thereof, title or
titles, names, trademarks, concepts, stories, plots, incidents, ideas, formulas,
formats, general content and any other literary, musical, artistic, or other
creative material included therein shall, as between Programmer and Affiliate,
remain vested in Programmer. Programmer and Affiliate agree that "Infomercials,"
defined as program-length direct sales commercials or programming, including,
but not limited to, "sponsor-owned promotional programming," shall not comprise
more than [*] hours of programming of the Service in each week and shall be
appropriate for family viewing. Anything herein to the contrary notwithstanding,
Infomercials shall only be broadcast during the hours between 12:00 midnight and
9:00 a.m. Eastern Time for the East Coast feed, or between 12:00 midnight and
9:00 a.m. Pacific Time for the West Coast feed. Programmer's

                                      -2-
<PAGE>

inclusion of Infomercials in the Service shall be subject to Section 1(d) below.
If Programmer does not provide the Service in its entirety to Affiliate (i.e.,
the programming received by any subscriber to the Service at a given point in
time is different from the programming received by any Service Subscriber at
such point in time except for multiple feeds for different time zones), then, in
addition to any other remedies available to Affiliate, at law or in equity,
Affiliate shall have the right to receive, exhibit, distribute, and authorize
the reception of the programming included in the Service as provided to
Affiliate and/or such additional programming provided to any other subscriber to
the Service. Programmer shall not propose or impose upon Affiliate, nor shall
Affiliate be obligated to pay, any surcharge or other cost (other than the
License Fees provided for in Section 2 hereof) for receipt and distribution of
the Service.

                  (c) Other Distribution Obligations. In addition, the parties
agree as follows:

                           (i) Subject to Programmer's obligations hereunder and
Affiliate's rights under Section 17, Affiliate shall distribute the Service on a
full time basis as transmitted by Programmer, in its entirety, in the order and
at the time transmitted by Programmer without any intentional and willful
editing, delays, alterations, interruptions, deletions or additions (excepting
Affiliate's commercial or other announcements, as permitted by Section 3 hereof)
and any insertions permitted pursuant to the provisions of Sections 1(d)
hereof). Programmer acknowledges that the DBS Distribution System requires and
applies digital compression and encryption processes prior to transmission and
decryption and decompression processes upon reception and agrees that such
processing does not constitute an alteration and/or other modification of the
Service. No later than January 1, 2003, Programmer shall fully encrypt the
satellite signal of the Service utilizing encryption technology commonly used in
the satellite distribution industry. Programmer shall, at its sole expense,
deliver the Service (as a turnaround, live feed) to DIRECTV from a domestic
communications satellite in the Territory commonly used for transmission of
television programming (or, at Programmer's option and expense, a fiber optic or
other facility reasonably acceptable to DIRECTV) to DIRECTV's broadcast
facilities located in Castle Rock, Colorado and Los Angeles, California
("Broadcast Facilities") or such other locations(s) as may be designated by
DIRECTV to Programmer in writing. Programmer shall provide Affiliate with two
receivers and decoders necessary to receive and decode the Service for each of
Affiliate's broadcast facilities in Castle Rock, Colorado and Los Angeles,
California.

                           (ii) Programmer and Affiliate shall use their
respective commercially reasonable efforts to maintain for the Service a high
quality of signal transmission in accordance with their respective technical
standards and procedures. Programmer agrees to include closed-captioning of the
audio portion of the Service as delivered by Programmer to DIRECTV in a manner
sufficient to allow DIRECTV to comply with any closed-captioning obligations for
the Service as may be imposed upon DIRECTV or Programmer by FCC (or other
governmental) rules and regulations during the Term, as modified from time to
time. Other than as required pursuant to the immediately preceding

                                      -3-
<PAGE>

sentence. Affiliate shall have no liability in connection with Programmer's
failure to prepare, insert or include closed-captioning in the Service as
required by this Section 1(c)(ii). Accordingly, Programmer shall indemnify,
defend and hold harmless Affiliate, as provided in Section 8 hereof, against and
from any and all losses, liabilities, claims, costs (including without
limitation, any costs of preparing and including closed-captioning in the
Service), damages and expenses, including without limitation, fines,
forfeitures, attorneys' fees, disbursements and court or administrative costs,
arising out of Programmer's breach of this Section 1(c)(ii).

                  (d) Programming Guide. During the Term, Programmer shall
provide the daily programming schedule for the Service (including any
Infomercials contained therein) to Tribune Media Service in order that Affiliate
may access the program schedule for purposes of the on-screen program guide.
Programmer hereby represents and warrants that it currently does not allow any
distributors to substitute commercial programming in lieu of infomercials
("Step-on-Rights"). In the event Programmer grants another distributor of the
Service (the "Other Distributor") Step-on-Rights, then Programmer will promptly
offer Affiliate such Step-on-Rights pursuant to terms and conditions that are
substantially similar to the terms and conditions directly related to the grant
of the Step-on-Rights to the Other Distributor.

                  (e) VBI. Affiliate reserves all rights in and to the signal
distribution capacity within the bandwidth of the Service as received at
Affiliate's system, including, without limitation, the capacity related to the
"vertical blanking interval" ("VBI"). Programmer acknowledges that Affiliate's
standard procedures as of the date of this Agreement strip out or do not include
any information (other than closed-captioning and voluntary ratings material)
that Programmer may insert in the VBI, and Affiliate shall not be obligated to
reconstruct or reinsert any such material on behalf of Programmer. While
Affiliate currently provides voluntary rating information to Service Subscribers
and currently intends to continue providing such information, Affiliate shall
not be obligated to continue doing so unless required by law. Affiliate will
provide Programmer thirty (30) days prior written notice if Affiliate
discontinues providing voluntary rating information, provided such
discontinuance must be based on reasonable business basis. Notwithstanding the
foregoing, to the extent Programmer supplies closed-captioning for the hearing
impaired within the VBI, such closed-captioning shall be contained in line 21 of
field one of the VBI as established by FCC rules (or in such location as the FCC
rules may permit from time to time), and Programmer hereby authorizes Affiliate
to provide Service Subscribers with the ability to receive such
closed-captioning and Affiliate agrees to pass such closed-captioning through to
Service Subscribers.

                  (f) New Service. Subject to the limitations set forth in the
last two sentences of this paragraph (f), Programmer agrees that it will not use
the Service to nest or incubate another cable television programming service
within the Service, nor will it "clone" the Service into a second cable
television programming service by migrating programming from the Service to any
such second service which is distributed by Programmer in the Territory unless
Programmer provides any such second cable television programming service to
Affiliate [*] and Affiliate agrees to [*] In the event that Programmer seeks to
nest,

                                      -4-
<PAGE>

incubate, or clone a second cable television programming service other than in
accordance with the foregoing limitations, Programmer will provide prompt
advance written notice to Affiliate and the parties shall discuss and Affiliate
will consider Programmer's proposal in good faith, but in no event shall
Affiliate be obligated to agree to such proposal or to waive any of its rights
and remedies.

                  (g) Change of Satellite. In the event Programmer either (i)
changes the satellite to which the Service is transmitted to a satellite or
other transmission medium not susceptible to viewing or utilization by
Affiliate's then-existing earth station equipment without affecting the receipt
of the signals of any other programming or other services then received (or
committed to be received) by such Affiliate, (ii) changes the technology used by
Programmer to encrypt the Service to a technology not compatible with
Affiliate's then-existing descrambling equipment, or (iii) compresses, digitizes
or otherwise modifies the signal of the Service in such a manner that it cannot
be received or utilized by Affiliate, then Affiliate shall have the right to
discontinue carriage of the Service, immediately; provided that this right of
discontinuance and deletion shall not apply to Affiliate if Programmer agrees to
promptly reimburse Affiliate for (I) the cost to acquire and install equipment
necessary for Affiliate to receive the signal of the Service from such new
satellite or other transmission medium, and/or (II) the cost to acquire and
install equipment necessary for Affiliate to descramble, receive and/or utilize
the signal of the Service. Programmer agrees to provide Affiliate with at least
ninety (90) days' prior written notice of a satellite or technology change as
set forth in subsections (i) through (iii) above.

                  (h) On-Screen Logos. It is understood and agreed that
Affiliate may superimpose a logo or "bug" in a corner of the screen identifying
Affiliate over the programming of the Service; provided, however, that
Affiliate's bug shall appear only intermittently during any portion of the
Service, and provided further that Affiliate shall not delete the Service's own
promotion bug or its on-screen graphics.

         2. Reports and Payments.

                  (a) Reports; Payments; Audit Rights. Within forty-five (45)
days after the end of each month during the Term, Affiliate shall furnish
Programmer a statement containing the number of "Service Subscribers" (defined
as DIRECTV Subscribers authorized by Affiliate to receive the Service), as
calculated by Affiliate as the average of the total number of Service
Subscribers on the first and last day of the applicable month (the "Monthly
Subscriber Level") together with payment of the License Fees, if any, in respect
of such Service Subscribers, calculated pursuant to Section 2(b). Programmer
shall accord confidential treatment to any information contained in the
aforementioned statement in accordance with Section 15. At Programmer's written
request no more than once per year, Affiliate shall provide Programmer a
statement by Affiliate's Chief Financial Officer that certifies Affiliate's
compliance with the provisions of this Section 2(a) and the accuracy of
Affiliate's reports.

                                      -5-
<PAGE>

                  (b) License Fees. As full and complete compensation for
Affiliate's right to distribute the Service, Affiliate shall pay to Programmer,
on a monthly basis, for each Service Subscriber receiving the Service from
Affiliate for such month, a "License Fee" determined pursuant to the rates set
forth in Exhibit B attached hereto and incorporated herein (the "Exhibit B
License Fees"). Said rates shall comply with all applicable Laws. As used
herein, "Law" shall mean any FCC and any other governmental (whether
international, federal, state, municipal or otherwise) statute, law, rule,
regulation, ordinance, code, directive and order, including without limitation,
any court order. [*]

                  (c) Late or Non-Payments. Any amounts not paid by Affiliate by
the date payment is due pursuant to the first sentence of Section 2(a), shall
accrue interest at the rate of one percent (1%) per month compounded monthly or
at the highest lawful rate, whichever shall be the lesser, from the date such
amounts were due until they are paid. If Programmer engages the services of any
collection agency or independent legal counsel to collect past due fees owed to
Programmer by Affiliate under this Agreement, Programmer shall be entitled to
full reimbursement from Affiliate for all reasonable costs and expenses incurred
in such collection efforts.

                  (d) [*]

                  (e) Bulk Billing. Affiliate shall have the right to calculate
the Exhibit B License Fees, if applicable, with respect to the distribution of
the Service to any location containing multiple sites such as rooms, units,
seats, televisions, etc., at which the Service may be received at such multiple
sites within the location, including, without limitation, hotels, motels,
commercial office buildings, hospitals and other healthcare facilities,
university dormitories, prisons, multiple dwelling facilities, commercial buses,
ships, trains and oil rigs, bars and restaurants and similar commercial
locations (each, a "Bulk-Rate Facility(ies)" for which Affiliate bulk bills, as
follows: "Bulk Bill Service Subscribers" shall be included as Service
Subscribers under Section 2(b) above, and such Bulk Bill Service Subscribers
shall be calculated monthly by dividing Affiliate's total monthly revenues
received (net of applicable taxes, refunds and rebates) from each account at
Bulk-Rate Facilities attributable to the level of service received at the
Bulk-Rate Facility including the Service, by the non-bulk bill prices of such
level of service.

                  (f) Airline Distribution. Affiliate shall be entitled to
distribute the Service to private aircraft at License Fees calculated according
to this Agreement (i.e., based on the number of Service Subscribers attributed
to such aircraft). Affiliate shall be entitled to distribute the Service to
commercial aircraft on substantially the same financial terms and conditions as
Affiliate distributes other basic cable network programming. Programmer
acknowledges and agrees that Affiliate may not receive payment for such
distribution of the Service to commercial aircraft, and in such case, no License
Fees shall be owed by Affiliate to Programmer with respect thereto.

         3. Format for Service. Programmer shall make two (2) minutes per hour
available in the schedule of the Service (such available time defined as
"Avails") for commercial or other announcements to be used by Affiliate or by
third parties identified by

                                      -6-
<PAGE>

Affiliate, and shall provide Affiliate with reasonable advance notice thereof,
provided that for those occasionally occurring programs on the Service in which
there is available to Programmer no, or less than two (2) minutes per hour of,
commercial announcement time, Programmer will not make any of such commercial
announcement time available to Affiliate during such hours. The Avails provided
by Programmer to Affiliate shall be no less favorable, in terms of scheduling,
availability, length and so forth, than those provided to any Other Distributor
of the Service. If the total amount of commercial announcement time on the
Service (not including time allocated to Affiliate hereunder) increases to more
than fourteen (14) minutes per hour, the commercial announcement time made
available to Affiliate shall increase by fifty percent (50%) of such increase
and every increase thereafter (e.g. if Programmer increases the total amount of
commercial announcement time on the Service above the foregoing maximum by sixty
(60) seconds, Affiliate will receive thirty (30) seconds of such additional
commercial announcement time). Programmer shall properly "tone switch", using
industry recognized equipment, via inaudible signals, all commercial
announcement minutes to enable Affiliate to insert its commercial announcements.
Affiliate shall insert its authorized commercial or other announcements only in
the positions and at the times which Programmer designates via cue tones and
without interruption of any program of the Service. Affiliate shall be solely
responsible for all materials inserted by Affiliate within the Service, and,
subject to Section 8, shall fully indemnify and hold Programmer harmless from
and against any and all claims and costs arising out of or related to the
content of Affiliate's Avails pursuant to this Section 3. Affiliate agrees that
it shall not provide any commercial or other announcements which do not comply
with applicable governmental codes or Programmer's reasonable policies and
practices and, in each case, of which Affiliate has actual knowledge.

         4. Marketing and Promotion.

                  (a) Packaging. Affiliate shall include the Service in
Affiliate's most highly-penetrated tier(s) or package(s) of video programming
services, currently Affiliate's "Total Choice" package, [*]. For purposes of
this Section, "DIRECTV Subscribers" shall not include subscribers that receive
the "DIRECTV Limited" package (or a successor or equivalent package thereto)
and/or only one or more of the following services via the DIRECTV Distribution
System: [*]. In the event that Affiliate restructures or otherwise changes its
Total Choice package, Affiliate shall distribute the Service on all successor
package(s) or tier(s) to such package and remains subject to the distribution
requirement in the first sentence of this Section. Affiliate shall market and
promote on a national basis the DIRECTV Distribution System and the "Total
Choice" package (or the successor(s) thereof) (including, without limitation,
the rebranded "Hallmark" Service) including, without limitation, through
national acquisition marketing efforts to prospective subscribers of the DIRECTV
Distribution System through television, print and/or such other media as DIRECTV
determines in its sole discretion.

                  (b) Programmer's Sales and Marketing Materials. Programmer
shall provide Affiliate, upon Affiliate's request, with promotional and
marketing advice for purposes of Affiliate's marketing of the Service.
Programmer shall promptly provide Affiliate,

                                      -7-
<PAGE>

upon the same terms as provided to any Other Distributor, with any and all
promotional, marketing or other related or similar materials of (or related to)
the Service which it produces or generally makes available to such Other
Distributor. If Affiliate shall request additional such materials, then
Programmer shall promptly provide such materials to Affiliate and Affiliate
shall reimburse Programmer for the actual costs thereof. Subject to Section 2(d)
above, Affiliate acknowledges that Programmer may occasionally develop targeted
marketing campaigns for one or more Other Distributors, which Programmer will
[*] under this subsection.

                  (c) Cooperative Marketing Funds. Programmer shall pay or
reimburse to Affiliate, on a quarterly basis, up to [*] of gross revenues from
the Exhibit B License Fees, if applicable, paid to Programmer under Section 2(b)
for the prior year (the "Cooperative Marketing Funds"), as reimbursement for the
expenses incurred by Affiliate during such prior year as national support for
marketing, advertising and promoting the Service. Such payment shall be made
within thirty (30) days after the date Affiliate has delivered to Programmer
documentation evidencing the amount and nature of any such expenditures. Where
an expenditure of Affiliate has been made for more than one programming service,
an equitable allocation of such expenditure shall be made by Affiliate based on
dividing the amount of the expenditure by the number of services marketed,
promoted or advertised by such expenditure. Notwithstanding anything to the
contrary herein, Programmer shall only pay or owe the Cooperative Marketing
Funds during the period when Affiliate is obligated to pay the Exhibit B License
Fees to Programmer.

                  (d) Access to Talent. During the Term, to the extent permitted
by the terms of any talent agreements between Programmer and the applicable
talent, Programmer will provide access to talent/performers appearing on the
Service, at no cost to either Affiliate or Programmer, for promotional
activities (including on-air promotional spots and print advertising) to promote
the Service and the DIRECTV "Total Choice" platform.

                  (e) Programmer Marketing Plan. [*] Programmer agrees that it
shall provide marketing, promotion and advertising in support of the Service
("Marketing Support") and the DIRECTV "Total Choice" platform and/or any
successor platform(s). The parties shall negotiate in good faith a detailed
marketing plan. Programmer agrees that the monetary value of the Marketing
Support that Programmer shall provide to Affiliate shall equal at least [*] per
year for the three (3) year period continuing through July 31, 2004 and [*] per
year for the three (3) year period commencing on August 1, 2004 and continuing
through July 31, 2007, provided that for the 2001 year, the total amount of the
Marketing Support that Programmer shall provide to Affiliate under this
Agreement and under the parties' Affiliation Agreement for DBS Satellite
Exhibition of Cable Network Programming dated as of March 6, 2000 ("Odyssey
Agreement") for the "Odyssey" Service shall in no event exceed [*].

                  (f) Dealer Showroom Accounts. Affiliate shall be entitled to
authorize agents authorized to sell Affiliate's programming services, including
without limitation, consumer electronic equipment dealers, TVRO dealers,
telephone companies, private cable

                                      -8-
<PAGE>

companies, direct sales agents, and other agents to receive the Service for the
sole purpose of demonstrating to their potential retail customers the
functioning of satellite reception equipment and Affiliate's services, including
the Service. Such agents shall not be deemed Service Subscribers, and therefore,
no License Fees shall be payable for distribution of the Service in such manner
to such agents.

                  (g) VIP Accounts. During the Term of the Agreement, Affiliate
shall be entitled to authorize "VIP" subscriber accounts for Affiliate's
employees, key customers, vendors to receive the Service; provides the number of
such VIP accounts shall not exceed [*]% of total DIRECTV Subscribers and such
VIP accounts are not charged for any other cable programming services. Such VIP
accounts shall not be deemed Service Subscribers, and therefore, no License Fees
shall be payable for such VIP accounts. During the Term of the Agreement,
Affiliate shall provide to Programmer authorization of up to [*] VIP
accounts for Affiliate's "Total Choice" package (or a successor package(s)
selected by Affiliate) to be distributed by Affiliate without charge by
Programmer, provided, however, Programmer acknowledges and agrees that such
accounts shall be allocated solely without charge, to Programmer's Affiliated
Companies and employees, and Programmer shall be responsible for all hardware
and installation costs associated with such accounts, and all charges other than
those related to the applicable Total Choice or successor package.

                  (i) Free Preview. Affiliate shall have the right, from time to
time, as part of marketing and sales promotions for Affiliate's services, to
offer the Service as part of the "Total Choice" package free of charge to
potential subscribers of the "Total Choice" package for up to ninety (90) days
in any year or to current subscribers of the "Total Choice" package for up to
thirty (30) days, or to provide other promotional programs (including rebates,
coupons or gift certificates) that effectively allow current or potential
subscribers of the "Total Choice" package to receive the Service as part of the
"Total Choice" package without charge for one month or more (all such
promotions, "Free Promotions"). Affiliate shall not be obligated to pay any
License Fees for such current or potential subscribers who are receiving such
Free Promotions, during such Free Promotion with respect to each subscriber.

                  (j) Enhanced Video/Interactive Programming. Affiliate shall
have the right to retransmit, over the DBS Satellites, any and all of the
following promptly upon Programmer making such content available to any Other
Distributor pursuant to the terms that are at least as favorable to Affiliate as
those terms given to the Other Distributor: (i) data and informational
enhancements to the programming contained in or delivered along with the
Service, as a continuous stream of information and data (or otherwise) and
designed to augment the programming contained in the Service ("Enhanced Video
Content"); and (ii) Web pages from Programmer's web site(s) to Affiliate's
customer's hard drives whether accessed via such customer's set-top boxes or
otherwise ("Web Caching", and together with the Enhanced Video Content and other
interactive services offered by Programmer, the "Interactive Services").
Programmer agrees that it shall make the Enhanced Video Content and the Web
Caching available to Affiliate on terms that are at least as favorable to
Programmer as those given to any Other Distributor. In addition, if Programmer
is developing such interactive services, Programmer shall consult with Affiliate
with respect to

                                      -9-
<PAGE>

the transmission technology interface that may be needed by Affiliate or DIRECTV
Subscribers in order to receive the Interactive Services. Programmer shall
utilize "industry standard" technologies with respect to the delivery and
reception of such Interactive Services.

                  (k) Website Links. Each of Affiliate and Programmer shall use
commercially reasonable efforts to provide "hot links" to each other's web
sites.

         5. Representations, Warranties and Covenants.

                  (a) By Affiliate. Affiliate warrants, represents and covenants
to Programmer that it:

                           (i) is in compliance with and will comply with all
material Laws with respect to its rights and obligations under this Agreement,
including without limitation, all relevant provisions of the Cable Television
Consumer Protection and Competition Act of 1992 (as may be amended and any
successor, replacement or similar Law or statute) and any and all regulations
issued pursuant thereto;

                           (ii) has the power and authority to enter into this
Agreement and to fully perform its obligations hereunder;

                           (iii) shall distribute the Service in the Territory
in accordance with and subject to the terms and conditions set forth in this
Agreement;

                           (iv) shall (A) arrange and pay for reception of the
Service (excluding any authorization fees) from the U.S. domestic communications
satellite from time-to-time designated by Programmer to Affiliate with
Affiliate's approval of such designation ("Programmer's U.S. Satellite"); and
(B) acquire and maintain, at Affiliate's sole expense, any equipment, including,
without limitation, backup or reserve descramblers, which may be necessary to
decode and unscramble the signal(s) for the Service;

                           (v) shall not, without Programmer's consent,
knowingly authorize or cause or knowingly permit any portion of the Service to
be recorded, duplicated, cablecast, exhibited or otherwise used (except on a
videocassette recorder or other home or personal taping device for private,
noncommercial use) for any purpose other than for distribution by Affiliate at
the time the same is made available;

                           (vi) shall not, without Programmer's prior written
approval, use the name of or logo for "Hallmark" or the names, titles or logos
of the Service or any of its programs, or the names, voices, photographs,
likenesses or biographies of any individual participant or performer in, or
contributor to, any program or any variations thereof, for any purpose other
than in material intended to advise DIRECTV Subscribers or potential DIRECTV
Subscribers of the availability and scheduling of the Service or as a channel
identifier. The restrictions set forth in this Section 5(a)(vi) shall apply only
to the extent they are applied by Programmer uniformly with respect to all of
its distributors of the Service, and

                                      -10-
<PAGE>

shall not apply if Affiliate has received a valid authorization from a third
party for any of the uses described in this Section 5(a)(vi); and

                           (vii) has obtained, and shall maintain in full force
during the Term hereof, such federal, state and local authorizations as are
material and necessary to operate the business it is conducting in connection
with its rights and obligations under this Agreement; and

                           (viii) the obligations created by this Agreement, in
so far as they purport to be binding on Affiliate constitute legal, valid and
binding obligations of Affiliate enforceable in accordance with their terms.

                  (b) By Programmer. Programmer warrants, represents and
covenants to Affiliate that:

                           (i) it is in compliance with and will comply with all
material Laws with respect to its rights and obligations under this Agreement,
including without limitation, all relevant provisions of the Cable Television
Consumer Protection and Competition Act of 1992 (as may be amended and any
successor, replacement or similar Law or statute) and any and all regulations
issued pursuant thereto;

                           (ii) it has the power and authority to enter into
this Agreement and to fully perform its obligations hereunder and once executed
this Agreement shall constitute a valid and binding agreement of Programmer
enforceable in accordance with its terms;

                           (iii) it has obtained, and shall maintain in full
force during the Term hereof, such federal, state and local authorizations as
are material and necessary to operate the business it is conducting in
connection with its rights and obligations under this Agreement;

                           (iv) it has obtained or will obtain all necessary
trademarks, copyrights, licenses and any and all other proprietary intellectual
property and other use rights necessary in connection with, and for Affiliate's
distribution of, the Service (including without limitation, the right to use the
name of or logo for "Hallmark Network" or the names, titles or logos of the
Service or any of its programs, or the names, voices, photographs, music,
likenesses or biographies of any individual participant or performer in, or
contributor to, any program or any variations thereof) and to perform its
obligations hereunder and grant the rights granted pursuant to Section 1;

                           (v) it shall not, without Affiliate's prior written
approval, use the name or logo for "DIRECTV" or other names and logos owned or
controlled by Affiliate (and its Affiliated Companies as defined in Section 8
below) without the prior written consent of Affiliate;

                           (vi) there are no (and it covenants that it shall not
enter into directly or indirectly, allow or otherwise permit any) affiliation,
distribution or any other agreements,

                                      -11-
<PAGE>

whether written or oral, granting to distributors and/or any other third party,
person or entity any form or type of exclusive or other rights that would limit
or restrict in any way Affiliate's rights to distribute the Service in the
Territory pursuant to this Agreement;

                           (vii) The obligations created by this Agreement, in
so far as they purport to be binding on Programmer constitute legal, valid and
binding obligations of Programmer enforceable in accordance with their terms;
and

                           (viii) The Service Rebranding shall be maintained for
at least two (2) years from the Service Rebranding Commencement Date.

         6. Term; Termination.

                  (a) Term; Extension; Service Commencement Date.

                  (i) Subject to earlier termination as set forth herein, the
term of this Agreement shall commence not later than twenty-four (24) hours
after the Share Delivery Date, as defined in the Stock Purchase Agreement. The
term shall end on December 31, 2007 (the "Term").

                  (ii) If the on-air rebranding of the "Odyssey" service to the
"Hallmark Channel" service ("Service Rebranding") is not maintained for at least
two (2) years from the Service Rebranding Commencement Date, Affiliate may, in
its sole discretion, upon written notice to Programmer terminate this Agreement
and/or distribute the Service for the remainder of the Term hereunder pursuant
to the terms of the Odyssey Affiliation Agreement.

                  (b) Termination for Breach, Bankruptcy; Discontinuance of
Business. This Agreement may be terminated by either party (the "Affected
Party"), in its discretion, at any time after any of the following occurrences,
except as provided in this Agreement, with respect to the other party (the
"Other Party"):

                           (i) the failure by the Other Party, its successors or
assigns to perform any material obligation hereunder which is not cured within
thirty (30) days after receipt of written notice thereof from the Affected Party
or as to which reasonable steps to cure have not been commenced within such
period (or are not thereafter diligently pursued and completed within an
additional thirty (30) days);

                           (ii) the filing of a petition in bankruptcy or for
reorganization by or against the Other Party under any bankruptcy act; the
assignment by the Other Party for the benefit of its creditors, or the
appointment of a receiver, trustee, liquidator or custodian for all or a
substantial part of the Other Party's property, and the order of appointment is
not vacated within thirty (30) days; or the assignment or encumbrance by the
Other Party of this Agreement contrary to the terms hereof; or

                                      -12-
<PAGE>

                           (iii) if Affiliate discontinues operation of the DBS
Distribution System, or Programmer discontinues operation and distribution of
the Service, in either which case neither party shall have any further liability
to the other.

                  (c) Termination by Affiliate. Affiliate may, subject to a
sixty (60) day cure period pursuant to the terms set forth in Section 6(b)(i),
terminate this Agreement upon ninety (90) days' prior written notice to
Programmer:

                           (i) if at any time the general quality and quantity
of programming (including, without limitation, the percentage of broadcast time
during which new seasonal material is presented) on the Service materially
changes from that existing as of the date of this Agreement, or the genre of
programming materially changes from that described in Section 1(b) and existing
on the date of this Agreement provided that a withdrawal, rescheduling or
substitution of programs, by itself, will not be deemed to constitute such a
material change; or

                           (ii) in the event that a transfer or sale by
Programmer does not comply with Section 11 below.

                  (d) Force Majeure. Notwithstanding any other provision in this
Agreement, neither Programmer nor Affiliate shall have any liability to the
other or any other person or entity with respect to any failure of Programmer or
Affiliate, as the case may be, to transmit or distribute the Service or perform
its obligations hereunder if such failure is due to any failure or material
degradation in performance of Programmer's U.S. Satellite or the DBS
Satellite(s) or transponders on such satellites (as applicable) or of the DBS
Distribution System (in which case, Affiliate shall be excused from its
distribution obligations under this Agreement), or of any
scrambling/descrambling equipment or any other equipment owned or maintained by
others (including, without limitation, Affiliate's automated billing and
authorization system), any failure at the origination and uplinking center used
by Programmer or Affiliate, any labor dispute, fire, flood, riot, legal
enactment, government regulation, Act of God, or any cause beyond the reasonable
control of Programmer or Affiliate (financial inability excepted), as the case
may be (a "Force Majeure"), and such non-performance shall be excused for the
period of time such failure(s) causes such non-performance; provided, however,
that if Affiliate determines in its sole discretion that it is commercially or
technically unfeasible to cure a Force Majeure with respect to the DBS
Distribution System or DBS Satellite and so notifies Programmer, then either
party may terminate this Agreement effective upon written notice to the other
party. The parties acknowledge and agree that although the Services may at any
given time be uplinked to only one of several DBS Satellites, failure or
degradation in any of such DBS Satellites may require Affiliate to reduce the
number of programming services available for allocation among all of the DBS
Satellites, with such reduction including, without limitation, curtailment or
termination of the distribution of the Service by Affiliate, at Affiliate's sole
discretion, provided that, in connection with such determination, Affiliate will
accord good faith consideration to Programmer's relationship with Affiliate and
the parties' mutual interest. Accordingly, Programmer further acknowledges and
agrees that the provisions set forth in the first sentence of this Section 6(d)
shall apply and shall exculpate Affiliate and excuse the performance of
Affiliate hereunder in

                                      -13-
<PAGE>

the event of a failure or degradation of any of the DBS Satellites or the
transponders on any such satellites, regardless of whether the satellite to
which the Service is uplinked at the time of such failure or degradation is
itself the subject of such failure or degradation. [*].

                  (e) Survival. Termination of this Agreement pursuant to this
Section 6 shall not relieve either party of any of its liabilities or
obligations under this Agreement, including without limitation those set forth
below in Section 8, which shall have accrued on or prior to the date of such
termination.

                  (f) Cross-Defaults. Notwithstanding anything to the contrary
herein, in the event there is a material breach of this Agreement (subject to
the cure period and procedure set forth in Section 6(b)(i) above) by Affiliate
(the "DIRECTV Default"), then such DIRECTV Default shall constitute a material
breach by DIRECTV Enterprises, Inc. under Section 5.4 of the Stock Purchase
Agreement. In such event, the determination of damages, if any, arising from the
DIRECTV Default may be based, among other things, upon the value of the DIRECTV
Shares (as defined in the Stock Purchase Agreement) provided by Crown Media
Holdings, Inc. and the value of the consideration provided by Programmer in
connection with this Agreement, provided that other relevant factors shall also
be considered such as the nature and materiality of the DIRECTV Default, the
relative significance of the DIRECTV Default to this entire Agreement and
provided that the amount of such damages is commensurate with such factors.
Notwithstanding anything to the contrary herein, in no event shall the Crown
Media Holdings, Inc. or an Affiliated Company have a direct claim or remedy
against the DIRECTV Shares or any of DIRECTV's rights under the Stock Purchase
Agreement or the Amended Stockholders Agreement (as defined in the Stock
Purchase Agreement) or hinder, impair or adversely affect such rights to any
extent whatsoever. In the event there is a material breach of the Stock Purchase
Agreement by Crown Media Holdings, Inc. (a "Company Default"), then such Company
Default shall constitute a material breach by Programmer under this Agreement.

         7. Separate Entities. No officer, employee, agent, servant or
independent contractor of either party hereto or their respective subsidiaries
or Affiliated Companies shall at any time be deemed to be an employee, servant
or agent of the other party for any purpose whatsoever, and the parties shall
use commercially reasonable efforts to prevent any such misrepresentation.
Nothing in this Agreement shall be deemed to create any joint venture,
partnership or principal-agent relationship between Programmer and Affiliate,
and neither shall hold itself out in its advertising or in any other manner
which would indicate any such relationship with the other.

                                      -14-
<PAGE>

         8. Indemnification; Limitation of Liability.

                  (a) By Programmer. Programmer shall indemnify, defend and hold
harmless each of Affiliate, its Affiliated Companies (as defined below),
Affiliate's contractors, subcontractors and authorized distributors and the
directors, officers, employees and agents of Affiliate, such Affiliated
Companies and such contractors, subcontractors and distributors (collectively,
the "Affiliate Indemnitees") from, against and with respect to any and all
claims, damages, liabilities, costs and expenses (including reasonable
attorneys' and expert's fees) incurred in connection with any claim against any
of the Affiliate Indemnitees arising out of (i) Programmer's breach of any
provision of this Agreement, (ii) material or programming supplied by Programmer
pursuant to this Agreement, including any Interactive Services, and distributed
by Affiliate in accordance with this Agreement, (iii) the distribution or
cablecast of any programming of the Service which violates or requires payment
for use or performance of any copyright, right of privacy or literary, music
performance or dramatic right, (iv) Programmer's advertising and marketing of
the Service, (v) Programmer's breach or default of any provision of any license,
agreement or instrument to which Programmer or Affiliated Company of Programmer
is a party that is caused by Programmer's obligations hereunder and/or (vi) any
other materials, including advertising or promotional copy, regarding the
Service, supplied or expressly approved by Programmer. Notwithstanding the
foregoing, if the law requires that the distributor obtain music performance
licenses for the Service separately from the programmer, Programmer shall not be
responsible for obtaining such license nor will Programmer indemnify Affiliate
for any costs associated with the failure to have such a license. If the only
music performance rights licenses available to Affiliate (after good faith
negotiations by Programmer for a non-income based license) are based upon
distributors' incomes, Programmer will indemnify Affiliate for such music
performance license(s) (except to the extent that any breach of the license is
based upon a misstatement of Affiliate's income), and the parties shall
negotiate in good faith for an equitable division of the license payments. In
addition, Programmer shall pay and hold the Affiliate Indemnitees harmless from
any federal, state, or local taxes or fees which are based upon revenues derived
by, or the operations of, Programmer. As used in this Agreement, "Affiliated
Company(ies)" shall mean, with respect to any person or entity, any other person
or entity directly or indirectly controlling, controlled by or under common
control (i.e., the power to direct affairs by reason of ownership of voting
stock, by contract or otherwise) with such person or entity and any member,
director, officer or employee of such person or entity.

                  (b) By Affiliate. Affiliate shall indemnify and hold harmless
each of Programmer, its Affiliated Companies, Programmer's contractors,
subcontractors and authorized distributors, each supplier to Programmer of any
portion of the Service hereunder and each participant therein and the directors,
officers, employees and agents of Programmer, such Affiliated Companies, such
contractors, subcontractors and distributors and such suppliers and participants
therein (collectively, the "Programmer Indemnitees") from, against and with
respect to any and all claims, damages, liabilities, costs and expenses
(including reasonable attorneys' and experts' fees) incurred in connection with
any claim against the

                                      -15-
<PAGE>

Programmer Indemnitees arising out of (i) Affiliate's breach of any provision of
this Agreement, (ii) the distribution by Affiliate of the Service, including,
without limitation, the insertion of commercial or other announcements pursuant
to Section 3 hereof (except with respect to claims relating to the content of
the Service for which Programmer is solely responsible pursuant to Section
8(a)(ii) and Section 8(a)(iii)), (iii) Affiliate's advertising and marketing of
the Service (except with respect to such advertising and marketing materials or
content supplied or approved by Programmer), (iv) any other materials, including
advertising or promotional copy, supplied or approved by Affiliate and (v)
Affiliate's breach or default of any provision of any license, agreement or
instrument to which Affiliate or Affiliated Company of Affiliate is a party that
is caused by Affiliate's obligations hereunder. In addition, Affiliate shall pay
and hold Programmer harmless from any federal, state, or local taxes or fees,
including any fees payable to local franchising authorities, which are based
upon revenues derived by, or the operations of, Affiliate.

                  (c) Survival. Termination of this Agreement shall not affect
the continuing obligations of each of the parties hereto as indemnitors
hereunder. The party wishing to assert its rights set forth in this Section 8
shall promptly notify the other of any claim or legal proceeding with respect to
which such party is asserting such right. Upon the written request of an
indemnitee, the indemnitor will (1) assume the defense of any claim, demand or
action against such indemnitee and/or (2) allow the indemnitee to participate in
the defense thereof, such participation to be at the expense of the indemnitee.
Settlement by the indemnitee without the indemnitor's prior written consent
shall release the indemnitor from the indemnity as to the claim, demand or
action so settled.

                  (d) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT:

                           (1) IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT, OCCASIONED BY
ANY FAILURE TO PERFORM OR THE BREACH OF ANY OBLIGATION UNDER THIS AGREEMENT FOR
ANY CAUSE WHATSOEVER, WHETHER BASED ON NEGLIGENCE OR OTHERWISE.

                           (2) SUBJECT TO SECTION 2(B) ABOVE, IN NO EVENT SHALL
ANY PROJECTIONS, FORECASTS, ESTIMATIONS OF SALES AND/OR MARKET SHARE OR EXPECTED
PROFITS, OR OTHER ESTIMATIONS OR PROJECTIONS BY AFFILIATE OR ANY OF ITS
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATED COMPANIES, REGARDING OR
RELATED TO AFFILIATE'S DBS BUSINESS BE BINDING AS COMMITMENTS OR, IN ANY WAY,
PROMISES BY AFFILIATE.

         9. Notices. Except as set forth below, all notices hereunder shall be
in writing and delivered by hand or sent by certified mail, return receipt
requested, fax, or by an overnight delivery service to the receiving party at
its address set forth above or as otherwise designated by written notice. Notice
to Programmer shall be provided as follows:

                                      -16-
<PAGE>

If by mail, overnight,
facsimile or                    Crown Media United States, LLC
personal delivery:              12700 Ventura Boulevard, Suite 2000
                                Studio City, California 91604
                                Attention:  Chief Operating Officer
                                Fax: (818) 755-2474
                                cc:  Senior Vice President, Network Distribution
                                     and Service
                                Fax: (818) 755-2625
                                Senior Vice President, Business & Legal Affairs
                                Fax: (818) 755-2461

Notice to Affiliate shall be provided as follows:

If by mail                      DIRECTV, Inc.
or facsimile:                   P.O. Box 92424
                                Los Angeles, California 90009
                                Attention:  Senior Vice President, Programming
                                Fax: (310) 535-5426
                                cc: General Counsel
                                Fax: (310) 726-4991

If by overnight or              DIRECTV, Inc.
personal delivery:              2230 East Imperial Highway
                                El Segundo, California 90245
                                Attention:  Senior Vice President, Programming
                                cc: General Counsel

Notice given by mail shall be considered to have been given five (5) days after
the date of mailing, postage prepaid certified or registered mail. Notice given
by facsimile machine shall be considered to have been given on the date receipt
thereof is electronically acknowledged. Notice given by an overnight delivery
service shall be considered to have been given on the next business day.

         10. Waiver. The failure of any party to insist upon strict performance
of any provision of this Agreement shall not be construed as a waiver of any
subsequent breach of the same or similar nature. All rights and remedies
reserved to either party shall be cumulative and shall not be in limitation of
any other right or remedy which such party may have at law or in equity.

         11. Binding Agreement; Assignment. Subject to Affiliate's rights under
Section 6(c)(ii), this Agreement shall be binding upon the parties hereto and
their respective successors and assigns, except that it may not be assigned by
transfer, by operation of law or otherwise, without the prior written consent of
the non-transferring party, which shall not be

                                      -17-
<PAGE>

unreasonably withheld or delayed; provided, however, that either Programmer or
Affiliate may assign its rights and obligations under this Agreement without
such consent, including without limitation, Affiliate's right to distribute the
Service (i) to an Affiliated Company or to a successor entity whether by sale of
assets, merger or otherwise; (ii) to a third party as part of preparing to go or
going public or as part of a merger, consolidation or sale of all or
substantially all of a party's assets or (iii) to a third party, provided the
transferring party remains primarily liable for the performance of such third
party's obligations hereunder.

         12. Laws of California. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and to be fully performed therein by residents of the State of
California, except to the extent that the parties' respective rights and
obligations are subject to mandatory local, State and Federal laws or
regulations.

         13. Entire Agreement and Section Headings. Except for the Stock
Purchase Agreement, this Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements, or understandings relating to the
subject matter hereof, including the Odyssey Agreement (subject to Section
6(a)(ii) above). This Agreement shall not be modified other than in a writing,
signed by each of the parties hereto. The section headings hereof are for the
convenience of the parties only and shall not be given any legal effect or
otherwise affect the interpretation of this Agreement.

         14. Severability. The parties agree that each provision of this
Agreement shall be construed as separable and divisible from every other
provision and that the enforceability of any one provision shall not limit the
enforceability, in whole or in part, of any other provision hereof. In the event
that a court of competent jurisdiction determines that a restriction contained
in this Agreement shall be unenforceable because of the extent of time or
geography, such restriction shall be deemed amended to conform to such extent of
time and/or geography as such court shall deem reasonable.

         15. Confidentiality. The parties agree that they and their employees
have maintained and will maintain, in confidence, the terms and provisions of
this Agreement, as well as all data, summaries, reports or information of all
kinds, whether oral or written, acquired or devised or developed in any manner
from the other party's personnel or files (the "Confidential Information"), and
that they have not and will not reveal the same to any persons not employed by
the other party except: (A) at the written direction of the other party; (B) to
the extent necessary to comply with the law or the order of a court of competent
jurisdiction, in which event the disclosing party shall so notify the other
party as promptly as practicable (and, if possible, prior to making any
disclosure) and shall seek confidential treatment of such information, or in
connection with any arbitration proceeding; (C) as part of its normal reporting
or review procedure to its parent company, its auditors and its attorneys, and
such parent company, auditors and attorneys agree to be bound by the provisions
of this Section 15; (D) in order to enforce any of its rights pursuant to this
Agreement; (E) to the NRTC, potential investors, insurers, and financing
entities; provided, however, that such

                                      -18-
<PAGE>

person described above agrees to be bound by the provisions of this Section 15;
or (F) if at the time of disclosure the Confidential Information is in the
public domain through no fault of the disclosing party. Promptly after the date
set forth in the first sentence of this Agreement, the parties shall use their
best reasonable efforts to agree upon a mutually acceptable press release with
respect to the parties' general business relationship under this Agreement and
to jointly issue and release such press release at a date mutually agreed upon.
During the Term, neither party shall issue an independent press release with
respect to this Agreement or the transactions contemplated hereby without
consulting with the other party and obtaining the prior written consent of the
other party.

         16. Inadequacy of Money Damages.

                  Programmer and Affiliate hereby acknowledge and agree that
Affiliate's distribution and marketing of the Service pursuant to the terms and
conditions contained herein are of the essence of this Agreement. Affiliate
further acknowledges and agrees that such carriage and marketing requirements,
subject to Force Majeure and other conditions of this Agreement, are special and
unique, and that Programmer would not be adequately compensated by the payment
of money damages in the event that Affiliate failed to comply with any of such
requirements and Programmer shall be entitled to specific performance of such
requirements. Programmer further acknowledges and agrees that the grant of
rights to Affiliate hereunder are special and unique, and that Affiliate would
not be adequately compensated by the payment of money damages in the event that
Programmer failed to comply with any of its obligations under this Agreement,
including without limitation, providing access to any Service programming to
Affiliate, as required hereunder and Affiliate shall be entitled to specific
performance of such obligations.

         17. Cessation of Program Distribution.

                  (a) If Affiliate determines that its provision of any Service
programming violates any Law, then, following written notice to Programmer,
Affiliate may cease distributing such programming to the extent, but only to the
extent, necessary and for the time necessary, as reasonably determined by
Affiliate, to prevent such violation of Law from continuing. However, if a bona
fide dispute exists between Programmer and Affiliate as to whether a violation
of any Law has occurred, Affiliate shall not cease distributing such programming
unless Affiliate has received either (i) notice of and delivers a copy (if the
action is in written form) to Programmer of an Indictment (as defined below), or
a threat of any such Indictment, from any entity with jurisdiction or claiming
to have jurisdiction to enforce such Law, alleging or stating that the provision
of such programming is or could be a violation of such Law, or (ii) an opinion
letter to Affiliate from outside counsel that may be retained by Affiliate
stating that, in its opinion, the distribution of such programming appears to be
or could be found to be in violation of any Law that is currently being, is
threatened to be, or there exists a material likelihood will be, enforced.
Furthermore, if Affiliate ceases to distribute such programming and if a bona
fide dispute exists as to whether a violation of such Law has occurred, then
Programmer shall have the immediate right to seek a temporary restraining order
(as its sole and exclusive remedy prior to any final judicial order), on notice

                                      -19-
<PAGE>

of four (4) hours or more to Affiliate, to prevent the cessation of such program
distribution based on the non-existence of any such violation of such Law.
Affiliate shall be entitled to oppose Programmer's attempts to obtain any such
injunctive relief, including any temporary restraining order, but hereby agrees
to the following:

                           (i) Affiliate will not contest the jurisdiction of,
or the venue of, any action brought by Programmer in a federal district court
sitting in the Central District Court of California;

                           (ii) for a period of five (5) consecutive days after
such cessation of program service by Affiliate, Affiliate will make itself
available to accept service by telecopy or personal delivery on a 24-hour-a-day
basis; and

                           (iii) if Programmer is seeking a temporary
restraining order, Affiliate will not challenge the sufficiency of notice from
Programmer of an impending hearing if such notice is served at least four (4)
hours before the scheduled court hearing.

As used herein, "Indictment" shall mean an indictment, summons, cease and desist
order, or other similar order or filing.

         18. Survival of Representations and Warranties. All representations and
warranties contained herein or made by the parties, and each of them, in
connection herewith shall survive any independent investigation made by either
party.

         19. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all such
counterparts together shall constitute but one and the same instrument. The
parties also agree that this Agreement shall be binding upon the faxing by each
party of a signed signature page thereof to the other party. If such a faxing
occurs, the parties agree that they will each also immediately post, by Federal
Express, a fully executed original counterpart of the Agreement to the other
party.

         20. Dispute Resolution and Arbitration.

                  (a) Initial Dispute Resolution Procedures. Any dispute or
disagreement between Programmer and Affiliate arising out of this Agreement
shall be resolved according to the following dispute resolution procedure:
First, such dispute shall be addressed to each party's project manager (or
equivalent level manager) for discussion and attempted resolution. If any such
dispute cannot be resolved by such project managers within five (5) business
days from the date that either party gives notice that such dispute or
disagreement exists, then such dispute shall be immediately referred to the
appropriate, respective vice presidents (or equivalent level person) for
discussion and attempted resolution.

                  (b) Arbitration Procedures. If a dispute cannot be resolved to
the mutual satisfaction of both parties within five (5) business days (or such
longer period as may be mutually agreed upon) after the second-tier referral
described in Section 20(a), such dispute

                                      -20-
<PAGE>

shall be referred to arbitration in Los Angeles, California before three
arbitrators in accordance with the Commercial Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association, in effect on the
date that notice of such dispute was originally given. The three arbitrators
shall be appointed as follows: Each party may select one arbitrator and,
thereafter these two shall select the third and final arbitrator. If the two
selected arbitrators cannot agree upon the third arbitrator within five (5) days
of their selection, then the third and final arbitrator shall be selected by and
according to the Arbitration Rules. Once appointed, the arbitrators shall
appoint a time and place for a pre-hearing status conference not more than
fourteen (14) days from the date of their appointment, and shall appoint a time
and place for a final hearing not more than forty-five (45) days from the date
of the status conference. The final hearing shall conclude no later than thirty
(30) days after its commencement. The party that demands arbitration of the
unresolved dispute or disagreement shall specify in writing the matter to be
submitted to arbitration. The arbitrators shall render a single written decision
setting forth an award and stating with reasonable detail the reasons for the
decision reached. Any cash component of the award shall be payable in United
States dollars through a bank in the United States. Each party shall bear its
own cost of preparing for and presenting its case; and the cost of arbitration,
including the fees, and expenses of the arbitrators will be shared equally by
the parties.

                  (c) Enforcement. The arbitration award shall be final and
binding upon the parties and may be confirmed by the judgment of any court
having appropriate jurisdiction, including without limitation California.

                  (d) Injunctive Relief. Notwithstanding the forgoing, but
subject to Subsection 20(a) above, neither Programmer nor Affiliate shall be
bound by the foregoing dispute resolution and/or arbitration procedures in this
Section 20 in the event that it seeks preliminary or interim injunctive or other
equitable relief.

         IN WITNESS WHEREOF, the undersigned parties have caused this Agreement
to be executed by their duly authorized representatives as of the day and year
first above written.

                                        DIRECTV, INC.

                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                        CROWN MEDIA UNITED STATES, LLC

                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                      -21-
<PAGE>

                                    EXHIBIT A

                              PROGRAMMING SCHEDULE

                                      -1-
<PAGE>

                                    EXHIBIT B

                             PROGRAMMER'S RATE CARD

<Table>
<Caption>
         YEAR                             LICENSE FEE
<S>                                       <C>
         2001                                 $[*]
         2002                                 $[*]
         2003                                 $[*]
         2004                                 $[*]
         2005                                 $[*]
         2006                                 $[*]
         2007                                 $[*]
</Table>

                                      -1-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}]]