Document:

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                                                                    EXHIBIT 10.2

                                 PROMISSORY NOTE

Amount:  $150,000,000                            Date:    As of August 31, 2001
                                                          Wilmington, Delaware

Section 1.  SUBORDINATION.

            Section 1.1. The indebtedness evidenced by this instrument is
subordinated to other indebtedness pursuant to, and to the extent provided in,
and is otherwise subject to the terms of the Subordination and Support Agreement
dated as of August 31, 2001, as amended or supplemented by and among Crown Media
Holdings, Inc., various of its subsidiaries, The Chase Manhattan Bank, as Agent
for various Lenders and the Issuing Bank, and Hallmark Cards, Incorporated (the
"Subordination Agreement"). Even though HC Crown Corp. is not a signatory to the
Subordination Agreement, it agrees to be bound by the terms thereof as if it
were the "Subordinated Creditor" as that term is defined therein and as if the
obligations of the Company pursuant to this Promissory Note were explicitly
enumerated as being included in the Subordinated Obligations as defined therein.

Section 2.  PROMISE TO PAY.

            Section 2.1 For value received, Crown Media Holdings, Inc., a
            Delaware corporation ("Company") and those Guarantors signatory
            hereto ("Guarantors"), hereby promise to pay to the order of HC
            Crown Corp., a Delaware corporation ("HC"), at such place as HC may,
            from time to time specify in writing, the principal amount
            outstanding under this Note together with all fees and accrued
            interest no later than the Maturity Date and in accordance with
            Section 6 hereof.

Section 3.  DEFINITIONS.

            "Affiliate" means, with respect to any party, any entity which
directly or indirectly holds a controlling interest in, is controlled by or
under common control with such party.

            "Applicable Interest Rate" means for any day with respect to any
LIBOR loan, the amount set forth in Section 5 hereof.

            "Bank Facility" means that certain Credit, Security, Guaranty and
Pledge Agreement of the Company with The Chase Manhattan Bank as Agent, and
certain Lenders identified therein dated as of August 31, 2001, for up to $300
Million.

            "Company" has the meaning specified in the introductory clause
hereto.

            "HC" has the meaning specified in the introductory clause hereto.

            "Indebtedness" means all obligations of borrowed money (including
capital leases, notes payable and letters of credit) of the Company, its
subsidiaries, or of any acquired business (without duplication) including
contingent liabilities.

            "LIBOR" means the three month rate published the first day of each
quarter in the Wall Street Journal.

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            "Maturity Date" means the earlier of (x) five (5) years six months
from the date hereof, (y) such time as the Maximum Amount has been reduced to
zero and (z) six months subsequent to the date of the termination or expiration
of the Bank Facility and the repayment of all obligations of the Company
thereunder.

            "Maximum Amount" means as of the time of any computation,
$150,000,000 less the sum of (i) Net Cash Proceeds applied in the manner
permitted by Section 6.5 (vii) of the Credit Agreement and (ii) any amounts
theretofore paid to The Chase Manhattan Bank, as Agent under the Bank Facility
by Hallmark Cards, Incorporated pursuant to the Limited Guarantee Agreement and
Acknowledgement dated as of August 31, 2001, made by HC in favor of The Chase
Manhattan Bank, as Agent. HC shall have no obligation to make loans under this
Note in an amount in excess of the Maximum Amount. To the extent that the
Maximum Amount decreases subsequent to the making of any loans hereunder, the
amount by which the outstanding principal amount of the loans exceeds the
Maximum Amount shall be subject to repayment to the extent allowed by the terms
of the Subordination Agreement referred to in Section 1 above.

            "Net Cash Proceeds" shall mean cash payments received in exchange
for the issuance of any debt or equity security by the Company or any of its
subsidiaries net of commissions and other reasonable fees and expenses incurred,
any taxes payable and reasonably estimated income taxes payable with respect to
the fiscal year during which such issuance occurs, as a consequence of any
repatriation of such cash payments to the Company.

Section 4.  USE OF PROCEEDS.

            The proceeds of the Facility shall be used: (i) to produce, acquire,
distribute and market film and television related properties, and (ii) for
general corporate purposes.

Section 5.  AVAILABILITY.

            HC agrees to make the Maximum Amount available to the Company in
accordance with the terms hereof only at such time as the Company shall have
borrowed all amounts then available to it under the bank Facility (giving effect
to all of the conditions precedent, restrictions and other terms of the Bank
Facility).

Section 6.  INTEREST.

            Section 6.1 Loans provided hereunder shall bear interest at a rate
            equal to LIBOR plus three percent (3%). Interest shall be payable
            quarterly as defined in Section 7.1. Upon the occurrence of an Event
            of Default, the Applicable Interest Rate plus 2% per annum shall
            apply on all outstanding loans.

            Section 6.2 All calculations of interest and fees shall be made on
            the basis of actual number of days elapsed in a 360-day year.

            Section 6.3 As of December 31, 2001, an additional one-half percent
            (.5%) will be added to the Applicable Interest Rate.

            Section 6.4 In the event the interest provisions of this Note shall
            result, because of (a) the reduction of principal, or (b) any other
            reason related or unrelated to such interest provisions at any time
            during the life of the loan or any combination of (a) and (b), in an
            effective rate of interest which, for any period of time, exceeds
            the limits of the usury laws or any other law applicable to the loan
            evidenced hereby, all sums in excess of those lawfully collectible
            as interest for the period in

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            question shall, without further agreement or notice between or by
            any party hereto, be applied to principal immediately upon receipt
            of such monies by HC with the same force and effect as though
            Company had specifically designated such extra sums to be so applied
            to principal and HC had agreed to accept such extra payment(s) as a
            premium-free prepayment.

Section 7.  REPAYMENT AND MANDATORY PREPAYMENT.

            Section 7.1 The obligation evidenced by this Note shall be repaid on
            the basis of interest only installments. Such payments shall accrue
            as of the end of each calendar quarter occurring during the term
            hereof and shall be paid on or before forty-five (45) days after the
            end of each such calendar quarter. Company shall pay to HC a single
            principal payment (together with all accrued and unpaid interest) on
            the Maturity Date, if not previously paid.

            Section 7.2 To the extent permitted by the Bank Facility, the
            Company shall have the obligation within five (5) days of receipt
            thereof to apply any Net Cash Proceeds realized since the date
            hereof to (i) prepay any outstanding balance of this Note or (ii)
            reduce the Maximum Amount hereunder by such amount by delivery of a
            written notice to that effect. Such mandatory prepayment shall be
            without premium or penalty and the Company shall not be entitled to
            reborrow such amounts.

            Section 7.3 Company shall have the privilege at any time and from
            time to time, to prepay this Note in whole or in part without
            premium or penalty.

Section 8.  FEES.

            In consideration of the loans provided hereunder, Company agrees to
pay to HC a commitment fee of one percent (1%) of the initial Maximum Amount,
payable in arrears in equal monthly installments for twelve (12) months.

Section 9.  COVENANTS.

            Section 9.1 Company shall deliver to HC not later than 45 days after
            the end of each fiscal quarter and not later than 90 days in the
            event of the fiscal year end:

            (i)         A consolidated balance sheet of Company and its
                        subsidiaries as of the end of the most recently ended
                        fiscal year together with the consolidated statements of
                        income, shareholder's equity, and cashflows
                        corresponding to the same; and

            (ii)        A balance sheet of Company as of the end of the most
                        recently ended fiscal quarter (together with the
                        consolidated statements of income, shareholder's equity,
                        and cashflows corresponding to such period), and, if HC
                        so requests, each such statement shall be certified by
                        the chief financial officer or the chief accounting
                        officer of Company as to fairness of presentation,
                        generally accepted accounting principles and consistency
                        (subject only to normal year-end adjustments).

Section 10. EVENTS OF DEFAULT.

            Subject to the terms of the Subordination Agreement referred to in
Section 1 above, each of the following shall constitute an event of default
hereunder (an "Event of Default"):

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            (i)         The failure of Company to make any payment of interest
                        hereunder when the same is due and payable or to pay the
                        principal balance in the lump sum or balloon payment
                        when the same is due and payable, and such failure to
                        pay continues for a period of five (5) days or more
                        after written notice thereof from HC;

            (ii)        The failure of Company to provide timely financial
                        information or certification as required by Section 8 if
                        such failure continues for a period of ten (10) days or
                        more after such information or certification is due and
                        HC has made a written demand upon Company for the same;

            (iii)       The failure to observe or perform any other term or
                        covenant contained in this Agreement and such default
                        shall continue for a period of ten (10) days after the
                        date upon which written notice thereof is given to the
                        Company.

            (iv)        Company shall be in default with respect to the Bank
                        Facility and such default could accelerate the maturity
                        of the indebtedness thereunder and such default is not
                        cured or waived within the grace period provided
                        therein.

Section 11. REMEDIES.

            Subject to the terms of the Subordination Agreement referred to in
Section 1 above, upon the occurrence of an Event of Default and at any time
thereafter during the continuance of such Event of Default hereunder, HC shall
have the right to declare the entire unpaid amount of principal and interest
hereunder immediately due and payable in full without presentation, demand or
protest, each of which is hereby waived by Company and Guarantors.

Section 12. WAIVERS.

            Section 12.1 The failure by HC to exercise any right or remedy
            available hereunder in the Event of Default shall in no event be
            construed as a waiver or release of the same. Likewise, HC shall
            not, by any act or omission or commission, be deemed to waive any
            right hereunder unless such waiver is evidenced in writing and
            signed by HC, and then only to the extent specifically set forth in
            such writing. Moreover, a waiver with respect to any one event shall
            not be construed as continuing or as a bar to or waiver of HC's
            rights or remedies with respect to any subsequent event.

            Section 12.2 Company and Guarantors expressly waive presentment for
            payment, notice of dishonor, protest, notice of protest, diligence
            of collection, and each other notice of any kind, and hereby consent
            to any number of renewals or extensions of time for payment hereof,
            which renewals and extensions shall not affect the liability of
            Company.

            Section 12.3 Company and Guarantors hereby waive and release all
            errors, defects and imperfections in any proceeding instituted by HC
            under the terms hereof as well as all benefits that might accrue to
            Company or Guarantors by virtue of any present or future laws
            exempting any property, real, personal or mixed, or any part of the
            proceeds arising from any sale of such property, from attachment,
            levy or sale under execution, or providing for any stay of
            execution, exemption from civil process, or extension of time for
            payment; and Company and Guarantors agree that any real estate that
            may be levied upon pursuant to a judgment obtained by virtue hereof,
            or any writ of execution issued thereon, may be sold upon any such
            writ in whole or in part or in any other manner desired by HC.

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Section 13. LICENSE.

            As further consideration for the loans provided hereunder, Company
hereby grants to HC and its Affiliates the royalty-free right to utilize any
technology which is developed at any time prior to five years from the date
hereof by or for Company or any of its Affiliates. Company will keep HC's
designated representatives advised of all technological developments during such
period. This Section 13 shall survive the termination or expiration of this
Agreement.

Section 14. NOTICES.

            Each notice required to be given to any party hereunder shall be in
writing and shall be deemed to have been sufficiently given for all purposes
when sent by certified or registered mail, return receipt requested, to the
party at its respective address as follows:

                  COMPANY:  Crown Media, Inc.
                            6430 S. Fiddlers Green Circle
                            Englewood, Colorado  80111
                            Attn: Mark Thompson

                  HC:       HC Crown Corporation
                            103 Foulk Road, Suite 214
                            Wilmington, DE  19803
                            Attn: David C. Eppes, Vice President and Controller

Until such time as the Company and HC have received written notice from The
Chase Manhattan Bank that the commitment of the Lenders under the Bank Facility
has terminated and that all outstanding obligations of the Company under the
Bank Facility have been satisfied, the Company and HC shall send a written copy
of any such notice given to any party hereunder to The Chase Manhattan Bank at
the address to which notices are to be delivered to The Chase Manhattan Bank
pursuant to the terms of the Bank Facility.

Section 15. ASSIGNABILITY.

            This Agreement shall be binding upon and inure to the benefit of
Company and HC and their respective successors and assigns; provided, however,
that this Agreement, or any portion thereof, may not be assigned by Company
without the written consent of HC.

Section 16. MODIFICATIONS.

            This Note may be modified only in a writing signed by Company and
HC. Any amendment, extension of time or any other modification shall not affect
Guarantors' obligations hereunder.

Section 17. GOVERNING LAW.

            This Note shall be governed by and construed according to the laws
of the State of Delaware without regard to the conflict of laws provisions
thereof.

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Section 18. HEADINGS.

            The heading preceding the text of each Section hereof is inserted
solely for convenience of reference and shall not constitute a part of this
Note, nor shall the same affect the meaning, construction of effect hereof.

Section 19. SEVERABILITY.

            If any provision of this Note or the application thereof is declared
by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall be unaffected and remain valid and enforceable
to the fullest extent permitted by law.

Section 20. REPLACEMENT.

            This Note hereby replaces that certain Note dated February 12, 2001
which Note is hereby terminated.

         IN WITNESS WHEREOF, the undersigned officers have executed this Note as
of the day and year first above written thereby legally binding such party to
the terms hereof.

HC CROWN CORP.                          CROWN MEDIA HOLDINGS, INC.

By  /s/ Judith Whittaker                By /s/ William J. Aliber
   --------------------------             --------------------------------------

Name: Judith Whittaker                  Name: William J. Aliber
     ------------------------                -----------------------------------

Title:     Vice President               Title: EVP and Chief Financial Officer
      -----------------------                 ----------------------------------

CROWN MEDIA INTERNATIONAL, INC.         CROWN MEDIA UNITED STATES, LLC

By  /s/ William J. Aliber               By /s/ Charles Stanford
   --------------------------             --------------------------------------

Name:   William J. Aliber               Name:  Charles Stanford
     ------------------------                -----------------------------------

Title:  Vice President                  Title: Vice President
      -----------------------                 ----------------------------------

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                                                                    EXHIBIT 10.3

                                             SUBORDINATION AND SUPPORT
                                        AGREEMENT dated as of August 31, 2001
                                        among (i) CROWN MEDIA HOLDINGS, INC., a
                                        Delaware corporation (the "Obligor"),
                                        (ii) the subsidiaries of the Obligor
                                        which are parties to the Credit
                                        Agreement from time to time (the "Other
                                        Debtors"), (iii) HALLMARK CARDS
                                        INCORPORATED, a Missouri corporation
                                        ("Hallmark Cards" and, together with its
                                        subsidiaries (other than the Obligor and
                                        its subsidiaries), the "Subordinated
                                        Creditors"), and (iv) THE CHASE
                                        MANHATTAN BANK, as agent for the Lenders
                                        and the Issuing Bank referred to in the
                                        Credit Agreement (the "Agent").

                             Introductory Statement

                  Pursuant to the terms of a Credit, Security, Guaranty and
Pledge Agreement dated as of August 31, 2001 among the Obligor, the Guarantors
which are parties thereto from time to time, the Lenders parties thereto from
time to time and the Agent (such agreement as hereinafter amended, supplemented
or otherwise modified, or renewed, replaced or extended from time to time being
referred to as the "Credit Agreement") the Lenders have agreed, subject to the
terms and conditions thereof, to make loans (the "Loans") to, and to participate
in letters of credit (the "Letters of Credit") issued on behalf of, the Obligor.
The Credit Agreement, the Notes referred to therein, the Letters of Credit and
the other documents, instruments and agreements contemplated thereby as they may
be amended, supplemented or otherwise modified, renewed, replaced or extended
from time to time, shall hereinafter be referred to as the "Senior Obligation
Documents." For purposes of this Agreement, unless otherwise defined herein,
capitalized terms used herein shall have the respective meanings given to such
terms in the Credit Agreement.

                  Hallmark Cards is the ultimate parent of the largest
shareholder of the Obligor. Hallmark Cards has previously, through HC Crown
Corp., a wholly owned subsidiary, made loans or otherwise extended credit to the
Obligor or Other Debtors, and may from time to time hereafter make or cause the
Subordinated Creditors to make additional loans or other extensions of credit to
the Obligor or Other Debtors. The term "Subordinated Obligations" shall include:
(a) all obligations of the Obligor and the Other Debtors to repay the principal
amount of such loans or other extensions of credit referred to in the preceding
sentence (including but not limited to those made pursuant to Section 6 below),
including all interest thereon, fees in relation thereto and all other amounts
payable to the Subordinated Creditors in connection therewith; (b) the rights of
any Subordinated Creditor to receive any payment or other amount from the
Obligor

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and/or any Other Debtor in connection with the Schedule 1.5 Obligations (as
defined in the Credit Agreement), including (without limitation) as the result
of any guarantee of such obligations; and (c) any rights that any Subordinated
Creditor has to collateral (other than licensed trademark, service mark,
tradename or service name rights) under security agreements entered into in
connection with the Trademark License Agreements dated as of August 1, 1999 and
March 27, 2001 (but, for clarification, the term "Subordinated Obligations"
shall not include any amounts payable under the Amended HEDC License Agreements
or the service agreement(s) referred to in Section 6.5 of the Credit Agreement).
Any promissory note (including, but not limited to, the Promissory Note dated as
of August 31, 2001 (the "Promissory Note") between Obligor as borrower and HC
Crown Corp. as lender) or other document evidencing any obligation referred to
in the preceding sentence (including the HEDC Purchase Agreement to the extent
it relates to the Schedule 1.5 Obligations), as well as any replacements or
substitutes therefor and any related loan agreement, security agreement or any
other related agreement are hereinafter referred to as "Junior Obligation
Documents." For purposes hereof, the "Amended HEDC License Agreements" shall
mean (a) the Amended and Restated Program License Agreement dated as of January
1, 2001, between HEDC and Crown Media US and (b) the Amended and Restated
Program License Agreement dated as of January 1, 2001 between HEDC and Crown
Media.

                  In order to induce the Agent and the Lenders to enter into the
Credit Agreement, the Subordinated Creditor has agreed, subject to the
provisions of this Subordination Agreement, that the Subordinated Obligations
shall be subordinate to the Senior Obligations (as hereinafter defined) and to
the support obligation provided below.

                  NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:

1. Agreement to Subordinate. The Subordinated Creditor agrees that the
Subordinated Obligations are and shall be subordinate and subject in right of
payment, to the extent and in the manner hereinafter set forth, to the prior
payment in full of the Senior Obligations and that any guarantees, security
interests, mortgages and other liens securing payment of the Subordinated
Obligations are and shall be subordinate, to the fullest extent permitted by law
and as hereinafter set forth, to any guarantees, security interests, mortgages
and other liens securing payment of the Senior Obligations, notwithstanding the
perfection, order of perfection or failure to perfect, any such security
interest or other lien, or the filing or recording, order of filing or
recording, or failure to file or record this Agreement or any instrument or
other document in any filing or recording office in any jurisdiction. The term
"Senior Obligations" shall mean all obligations of the Obligor and the Other
Debtors under the Senior Obligation Documents including, without limitation,
whether outstanding at the date hereof or hereafter incurred or created, all
obligations to pay principal, premium, if any, interest (including, without
limitation, interest accruing after the commencement of any bankruptcy,
insolvency, reorganization or similar proceedings with respect to any such
Person whether or not determined to be an allowed claim in any such proceeding),
charges, costs, expenses and fees including, without limitation, the
disbursements and reasonable fees of counsel to the Agent or the Lenders, all
obligations to reimburse or indemnify the Agent or the Lenders in any way, and
all renewals, extensions, restructurings, refinancings or refunding of any
indebtedness under the Senior

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Obligation Documents in the nature of a "workout" or otherwise. This Agreement
may be enforced by the Agent or by any other holder of the Senior Obligations
including, but not limited to, holders of Senior Obligations issued as a result
of a renewal, extension, restructuring, refinancing or refunding.

                  The expressions "prior payment in full," "payment in full,"
"paid in full" or any other similar term(s) or phrase(s) when used herein with
respect to Senior Obligation Documents shall mean the indefeasible payment in
full, in cash, of all of the Senior Obligations.

2.       Restrictions on Payment of the Subordinated Obligations, Etc.

         (a) Except as otherwise set forth herein, the Subordinated Creditors
will not ask, demand, sue for, take or receive, directly or indirectly, from the
Obligor, the Other Debtors or any affiliate thereof, in cash or other property,
by set-off, by realizing upon collateral, foreclosing on any lien or otherwise,
exercise of any remedies or rights under the Junior Obligation Documents or by
executions, garnishments, levies, attachments or by any other action relating to
the Subordinated Obligations, or in any other manner, payment of, or additional
security for, all or any part of the Subordinated Obligations unless and until
the Senior Obligations shall have been paid in full. Neither the Obligor nor any
of the Other Debtors will make any payment on any of the Subordinated
Obligations, or take any other action, in contravention of the provisions of
this Agreement.

         (b) So long as none of the events contemplated by Section 3(a) hereof
shall have occurred, the Obligor may make payments on the Subordinated
Obligations to the extent (but only to the extent) permitted by Section 6.5 of
the Credit Agreement.

         (c) Hallmark Cards further acknowledges and agrees that, except as
otherwise set forth herein, the Subordinated Creditors will not accept any
security for the Subordinated Obligations unless and until the Obligations have
been paid in full.

3.       Additional Provisions Concerning Subordination. Hallmark Cards and the
Obligor agree as follows:

         (a) In the event of (i) any dissolution, winding up, liquidation or
reorganization of the Obligor or any Other Debtor (whether voluntary or
involuntary and whether in bankruptcy, insolvency or receivership proceedings,
or upon an assignment for the benefit of creditors or proceedings for voluntary
or involuntary liquidation, dissolution or other winding up of the Obligor or
any Other Debtor, whether or not involving insolvency or bankruptcy, or any
other marshalling of the assets and liabilities of the Obligor or any Other
Debtor or otherwise); or (ii) any Event of Default or an event which with notice
and/or passage of time would constitute an Event of Default (as such term is
defined in the Credit Agreement), or any default, demand for payment or
acceleration of maturity regarding the Subordinated Obligations:

                  (i) all Senior Obligations (including, but not limited to, the
obligation to provide cash collateral for outstanding L/C Exposure) shall first
be paid to the Agent for the benefit of the Lenders and the Issuing Bank in full
before any payment or distribution is made upon the principal of or interest on
or any fees, costs, charges or expenses in connection with the

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Subordinated Obligations, and before any other action described in Section 2 or
7 hereof is taken by the Subordinated Creditors; and

                  (ii) any payment or distribution of assets of the Obligor or
any Other Debtor, whether in cash, property or securities, to which any of the
Subordinated Creditors would be entitled except for the provisions hereof, shall
be paid or delivered by the Obligor or any Other Debtor, or any receiver,
trustee in bankruptcy, liquidating trustee, disbursing agent, agent or other
person making such payment or distribution, directly to the Agent for the
benefit of the Lenders and the Issuing Bank, to the extent necessary to pay in
full all Senior Obligations remaining unpaid, after giving effect to any
concurrent payment or distribution to the Agent for the benefit of the Lenders
and the Issuing Bank before any payment or distribution is made to the
Subordinated Creditors;

         (b) In any proceeding referred to or resulting from any event referred
to in subsection (a) of this Section 3 commenced by or against the Obligor or
any Other Debtor:

                  (i) The Agent may, and is hereby irrevocably authorized and
empowered (in its own name or in the name of the appropriate Subordinated
Creditors or otherwise), but shall have no obligation to, (i) demand, sue for,
collect and receive every payment or distribution referred to in subsection (a)
of this Section 3 and give acquittance therefor, (ii) file claims and proofs of
claim in respect of the Subordinated Obligations and (iii) take such other
action as the Agent may deem necessary or advisable for the exercise or
enforcement of any of the rights or interests of the Agent and the Lenders and
the Issuing Bank hereunder; provided, however, that the Agent hereby agrees to
provide Hallmark Cards with prior written notice, to the extent reasonably
possible, in the event the Agent waives or compromises any claim in respect of
the Subordinated Obligations; and

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

         (c) All payments or distributions upon or with respect to the
Subordinated Obligations which are received by the Subordinated Creditors
contrary to the provisions of this Agreement shall be deemed to be the property
of the Agent, shall be received in trust for the benefit of the Agent, shall be
segregated from other funds and property held by the Subordinated Creditors and
shall be forthwith paid over to the Agent in the same form as so received (with
any necessary endorsement) to be applied to the payment or prepayment of the
Senior Obligations until the Senior Obligations shall have been paid in full;

         (d) The Subordinated Creditors hereby waive any requirement for
marshalling of assets by the Agent in connection with any foreclosure of any
lien of the Agent, the Lenders or the Issuing Bank under the Senior Obligation
Documents;

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         (e) The Subordinated Creditors shall not take any action to impair or
otherwise adversely affect the foreclosure of, or other realization of the
rights of the Agent or the Lenders and the Issuing Bank under the Senior
Obligation Documents; and

         (f) The Agent is hereby authorized to demand specific performance of
this Agreement at any time when the Subordinated Creditors shall have failed to
comply with any of the provisions of this Agreement, and the Subordinated
Creditors hereby irrevocably waive any defense based on the adequacy of a remedy
at law which might be asserted as a bar to such remedy of specific performance.

4. Subrogation. The Subordinated Creditors agree that no payment or distribution
to the Agent for the benefit of the Lenders and the Issuing Bank pursuant to the
provisions of this Agreement shall entitle the Subordinated Creditors to
exercise any rights of subrogation in respect thereof until the Senior
Obligations shall have been paid in full.

5. Legend. The Subordinated Creditors and the Obligor will cause each promissory
note evidencing any of the Subordinated Obligations, any replacement thereof and
any mortgage or security document relating thereto to include or have endorsed
thereon the following provision:

                  "The indebtedness evidenced by this instrument is subordinated
                  to other indebtedness pursuant to, and to the extent provided
                  in, and is otherwise subject to the terms of, the
                  Subordination and Support Agreement dated as of August 31,
                  2001 as amended or supplemented by and among Crown Media
                  Holdings, Inc., various of its subsidiaries, The Chase
                  Manhattan Bank, as Agent for various Lenders and the Issuing
                  Bank, and Hallmark Cards Incorporated."

6. Obligation to Provide Support Amount.

         (a) Until the Total Commitment shall terminate and the Senior
Obligations are paid in full, Hallmark Cards agrees (i) to cause all of the
Schedule 1.5 Obligations which have been novated to the Borrower and/or its
Subsidiaries (i.e., those with respect to which any Credit Party has contractual
obligations owing directly to unaffiliated third parties) to be paid in full to
such third parties in accordance with their terms and (ii) to cause HC Crown
Corp. to advance up to $150,000,000 under the HCC Promissory Note (irrespective
of whether any "Event of Default" (as defined in the HCC Promissory Note) exists
at the time of any requested advance, but subject to reduction of such
commitment amount as a result of the application of Net Cash Proceeds in the
manner contemplated by Section 6.5 (vii)(x) of the Credit Agreement in
connection with a reduction of HC Crown Corp.'s funding commitment) (the
"Support Amount") to the Obligor to the extent necessary to enable the Obligor
to meet its cash needs including, but not limited to, the repayment of the
Senior Obligations, provided that the Obligor has theretofore borrowed the full
amount then available to it under the Credit Agreement after giving effect to
all the provisions of the Credit Agreement that restrict or limit such
availability.

         (b) Notwithstanding any provision to the contrary contained in the
Promissory Note, HC Crown Corp. shall, up to the maximum amounts provided
therein, be obligated to

                                      - 5 -
<PAGE>   6
advance the Support Amount whether or not an event of default shall have
occurred under either the Promissory Note or under the Credit Agreement.

         (c) The release of any of the Subordinated Creditors from the
obligations set forth in this Section 7 shall not affect the other provisions of
this Agreement including but not limited to the subordination provisions
contained herein.

7. Negative Covenants of the Subordinated Creditors. So long as any of the
Senior Obligations shall remain outstanding, the Subordinated Creditors will
not, without the prior written consent of the Agent:

         (a) Sell, assign, pledge, encumber or otherwise dispose of any
instrument evidencing the Subordinated Obligations or any collateral securing
the Subordinated Obligations unless such sale, assignment, pledge, encumbrance
or other disposition is made expressly subject to this Agreement and the other
party to such sale, assignment, pledge, encumbrance or other disposition
consents in writing to be bound by the terms hereof;

         (b) Permit the terms of the Junior Obligation Documents or collateral
securing any Subordinated Obligations to be changed in any way which would limit
or impair these subordination provisions, or accept any collateral.

         (c) Declare all or any portion of the Subordinated Obligations due and
payable prior to the date fixed therefor or realize upon, or otherwise exercise
any remedies with respect to, any collateral securing the Subordinated
Obligations or take any other action described in Section 2 hereof; or

         (d) Commence, or join with any entity other than the Agent and/or the
Lenders in commencing any proceeding referred to in subsection (a) of Section 3
hereof.

8. Obligations Unconditional. All rights and interests of the Agent hereunder,
and all agreements and obligations of the Subordinated Creditors, the Obligor
and the Other Debtors hereunder, shall remain in full force and effect
irrespective of:

         (a) Any lack of validity or enforceability of any Senior Obligation
Document or any other agreement or instrument relating thereto;

         (b) Any change in the time, manner or place of payment of, or in any
other term of, all or any of the Senior Obligations, or any other amendment or
waiver of or any consent to departure from any Senior Obligation Document;

         (c) Any exchange, release or nonperfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the Senior Obligations; or

         (d) Any other circumstances which might otherwise constitute a defense
available to, or a discharge of, either the Obligor or any Other Debtor in
respect of the Senior Obligations or of the Subordinated Creditors, the Obligor
or any Other Debtor in respect of this

                                      - 6 -
<PAGE>   7
Agreement and the other Fundamental Documents other than the payment in full of
the Senior Obligations.

9. Present Subordinated Obligations. Hallmark Cards hereby represents and
warrants that there are no outstanding Subordinated Obligations, except as
disclosed on Schedule 1 hereto.

10. Additional Agreements and Waivers by the Subordinated Creditors. The
Subordinated Creditors agree that neither the Agent nor the Issuing Bank or any
Lender shall have any liability or obligation to the Subordinated Creditors on
account of exercise of the rights and remedies of the Agent, the Issuing Bank
and/or the Lenders under any Senior Obligation Document. The Subordinated
Creditors waive the right to commence or pursue any legal action (whether suit,
counterclaim, cross claim or other action) on account of exercise of the rights
and remedies of the Agent, the Issuing Bank and/or the Lenders under any Senior
Obligation Document and alleging or based on a theory of breach of fiduciary
obligations of the Agent, the Issuing Bank and/or the Lenders, equitable
subordination of claims of the Agent, the Issuing Bank and/or the Lenders
against the Obligor or any Other Debtor, conflicts of interest by the Agent, the
Issuing Bank and/or the Lenders or similar theories premised in any such case on
the exercise of control or influence on management by the Agent, the Issuing
Bank and/or the Lenders, actual management or control of the Obligor or any
Other Debtor by the Agent, the Issuing Bank and/or the Lenders, voting any of
the stock of the Obligor or an Other Debtor, or other pursuit of rights or
remedies by the Agent, the Issuing Bank and/or the Lenders under any Senior
Obligation Document.

11. Further Assurances. The Subordinated Creditors, the Obligor and the Other
Debtors will, at their own expense and at any time and from time to time,
promptly execute and deliver all further instruments and documents, and take all
further action that the Agent may reasonably request, in order to perfect or
otherwise protect any right or interest granted or purported to be granted
hereby or to enable the Agent to exercise and enforce its rights and remedies
hereunder. The Subordinated Creditors further authorize the Agent to file UCC
financing statements and any amendments thereto or continuations thereof with
regard to the Subordinated Obligations.

12. Expenses. The Obligor agrees to pay to the Agent, upon demand, the amount of
any and all reasonable expenses, including the reasonable fees and expenses of
counsel for the Agent, which the Agent may incur in connection with the exercise
or enforcement of any of the rights or interests of the Agent or the Lenders
hereunder.

13. Notice. All demands, notices and other communications which any party hereto
may desire or may be required to give to any other party hereunder shall be in
writing (including telegraphic communication) and shall be mailed, telecopied,
telegraphed or delivered to such other party at its address as follows:

                                      - 7 -
<PAGE>   8

         (a)      to the Agent at:

                  The Chase Manhattan Bank
                  1166 Avenue of the Americas
                  Floor 17
                  New York, New York 10036
                  Attn.:   Garrett J. Verdone
                           Senior Vice President
                  Facsimile:  (212) 899-2893

                  with a courtesy copy to:

                  J.P. Morgan Securities Inc.
                  1800 Century Park East
                  Suite 400
                  Los Angeles, CA  90067
                  Attn:  P. Clark Hallren
                  Facsimile:  (310) 788-5628

         (b)      to the Obligor or an Other Debtor to it at:

                  Crown Media Holdings
                  6430 S. Fiddlers Green Circle
                  Suite 500
                  Greenwood Village, CO  80111
                  Attn:  Charles Stanford, Esq.
                  Facsimile:  (303) 221-3779

         (c)      to the Subordinated Creditors at:

                  Hallmark Cards Incorporated
                  2501 McGee, P.O. 419126, Mail Drop # 339
                  Kansas City, MO 64108
                  Attn:  General Counsel
                  Fax:  (816) 274-7171

or to any such party at such other address as shall be designated by such party
in a written notice to each other party, complying as to delivery with the terms
of this Section 13. All such demands, notices, and other communications shall be
effective when received or five business days after mailing, whichever is
earlier.

14. SERVICE OF PROCESS. THE SUBORDINATED CREDITORS (A) HEREBY IRREVOCABLY SUBMIT
TO THE JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW YORK AND THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
OR BASED UPON THIS AGREEMENT OR THE SUBJECT

                                      - 8 -
<PAGE>   9
MATTER HEREOF BROUGHT BY THE AGENT OR ITS SUCCESSORS OR ASSIGNS AND (B) HEREBY
WAIVE AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN
ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT THEY ARE NOT SUBJECT
PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT THEIR PROPERTY IS
EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (C) HEREBY WAIVE IN ANY SUCH
ACTION, SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS (EXCEPT FOR COMPULSORY
COUNTERCLAIMS). THE SUBORDINATED CREDITORS AND THE OBLIGOR AND THE OTHER DEBTORS
HEREBY CONSENT TO SERVICE OF PROCESS BY REGISTERED MAIL AT THE ADDRESS TO WHICH
NOTICES ARE TO BE GIVEN. THE SUBORDINATED CREDITORS AGREE THAT SUBMISSION TO
JURISDICTION AND CONSENT TO SERVICE OF PROCESSES BY MAIL IS MADE FOR THE EXPRESS
BENEFIT OF THE AGENT. FINAL JUDGMENT AGAINST THE SUBORDINATED CREDITORS IN ANY
SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS (A) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR
TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND OF THE AMOUNT OF
ANY INDEBTEDNESS OR LIABILITY OF THE SUBORDINATED CREDITORS THEREIN DESCRIBED,
OR (B) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF SUCH OTHER
JURISDICTION; PROVIDED, HOWEVER, THAT THE AGENT MAY AT ITS OPTION BRING SUIT, OR
INSTITUTE OTHER JUDICIAL PROCEEDINGS, AGAINST THE SUBORDINATED CREDITORS OR ANY
OF THEIR ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED STATES OR OF ANY
COUNTRY OR PLACE WHERE THE SUBORDINATED CREDITORS OR THEIR ASSETS MAY BE FOUND.

15.      Miscellaneous.

         (a) No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by the Subordinated Creditors, the Obligor
and the Agent, and no waiver of any provision of this Agreement, and no consent
to any departure therefrom, shall be effective unless it is in writing and
signed by the Agent, and any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

         (b) No failure on the part of the Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.

         (c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction, shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or invalidity without invalidating
the remaining portions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

                                      - 9 -
<PAGE>   10
         (d) This Agreement shall be binding on the Subordinated Creditors and
the Obligor, the Other Debtors and their respective successors and assigns
including without limitation any holders of the instruments evidencing the
Subordinated Obligations.

         (e) This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

         (f) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts to be fully
performed within the State of New York.

         (g) Hallmark Cards agrees that it shall take whatever action is
necessary to bind each of the Subordinated Creditors to the terms of this
Agreement including, but not limited to, obtaining the agreement of such other
Subordinated Creditors to the Submission to Jurisdiction provisions contained in
Section 14 hereof. Hallmark Cards, Incorporated agrees to be responsible to the
Agent for the performance by the other Subordinated Creditors of their
obligations hereunder.

         (h) This Agreement is intended for the sole benefit of the Agent, the
Lenders, the Issuing Bank and their respective successors and assigns and
nothing herein, express or implied, is intended to or shall confer upon any
other Person, any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

                                     - 10 -
<PAGE>   11

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.

                                    CROWN MEDIA HOLDINGS, INC.

                                    By:   /s/ William J. Aliber
                                          --------------------------------------
                                          Name: William J. Aliber
                                          Title: Executive Vice President and
                                          Chief Financial Officer

                                          GUARANTORS:

                                          CROWN MEDIA INTERNATIONAL, INC.
                                          CROWN MEDIA INTERNATIONAL (SINGAPORE)
                                            INC.
                                          CROWN ENTERTAINMENT LIMITED
                                          CROWN MEDIA INTERNATIONAL (HK)
                                            LIMITED
                                          CROWN MEDIA DISTRIBUTION, LLC
                                          HEN LLC
                                          HEN (L) LTD.
                                          HM HOLDINGS OF DELAWARE LLC
                                          CROWN MEDIA UNITED STATES LLC
                                          HM INTERMEDIARY LLC
                                          CITI TEEVEE LLC

                                     - 11 -
<PAGE>   12

                                          DOONE CITY PICTURES LLC
                                          HALLMARK INDIA PRIVATE, LTD.

                                          By: /s/ William J. Aliber
                                              ---------------------------------
                                              Name: William J. Aliber
                                              Title:

                                          HALLMARK CARDS, INCORPORATED

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

                                          THE CHASE MANHATTAN BANK, as Agent

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

                                     - 12 -
<PAGE>   13

                                                                      SCHEDULE 1

                 CURRENTLY OUTSTANDING SUBORDINATED OBLIGATIONS

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