Hallmark Cards, Inc. Forbearance Letter to Crown Media Regarding Debt Repayment (October 2005)
Hallmark Cards, Inc. agrees not to demand repayment from Crown Media for several large notes and payables, totaling hundreds of millions of dollars, before October 31, 2006. This includes notes payable to HC Crown, payables to Hallmark Entertainment Holdings, and a note for license fees to Hallmark Entertainment Distribution. Hallmark also agrees not to seek reimbursement for any amounts drawn on a Citibank letter of credit supporting Crown Media’s revolving credit agreement before that date. If Crown Media is sold before October 31, 2006, Hallmark may reconsider this arrangement.
Exhibit 10.1
October 1, 2005
Mr. William Aliber
Chief Financial Officer
Crown Media
6430 South Fiddlers Green Circle
Greenwood Village, CO 80111
Dear Mr. Aliber:
Pursuant to your request, Hallmark Cards, Incorporated confirms to you that Hallmark Cards will not instruct its wholly-owned subsidiaries to demand, nor will Hallmark Cards or any of its wholly-owned subsidiaries demand, payment from Crown Media on any of the following obligations prior to October 31, 2006:
$75.0 million Note payable to HC Crown plus accrued interest thereon;
$400.0 million Note payable to HC Crown plus accrued interest thereon;
$70.0 million payables to Hallmark Entertainment Holdings incurred in conjunction with the library transaction; and
$133.0 million Note dated October 1, 2005, relating to past due amounts for license fees payable to Hallmark Entertainment Distribution (HED) plus accrued interest thereon.
Furthermore, in the event that at any time Crown Media’s banks draw on the Letter of Credit provided by Citibank N.A. in support of Crown Media’s Revolving Credit Agreement, Hallmark will not request reimbursement from Crown Media for such amounts prior to October 31, 2006.
It would be Hallmark’s intent to re-evaluate this repayment schedule if all or substantially all, the stock or assets of Crown Media were sold to a third party prior to October 31, 2006.
Sincerely,
Robert Druten
Chief Financial Officer
2501 McGee, Box 419580, Kansas City, Missouri 64141-6580
