PROMISSORYNOTE

Exhibit 10.3

PROMISSORY NOTE

§1.          Promise to Pay.

For value received, the Company hereby promises to pay to the order of Hallmark Cards, Incorporated or its assigns, (“Hallmark”) at such place as Hallmark may, from time to time specify in writing, the above principal amount outstanding under this Note (as the same may be adjusted pursuant to § 2.4 hereof) together with all fees and accrued interest no later than the Maturity Date and in accordance with Section 2 hereof.

§2.          Interest and Adjustments.

§2.1        Loans provided hereunder shall bear interest at the rate of LIBOR plus 300 basis points per annum from the effective date indicated above and shall be payable in full on the date two (2) years thereafter (“Maturity Date”).

§2.2        All calculations of interest and fees shall be made on the basis of actual number of days elapsed in a 360-day year and accrued but unpaid interest shall be added to the principal amount annually.

§2.3        “LIBOR” shall mean the three month rate for London Inter-Bank Offering Rate published for the first day of each quarter in the Wall Street Journal.

§2.4        The principal amount of this Note reflects repayments due to Hallmark pursuant to that certain Tax Sharing Agreement dated March 11, 2003 by and between the parties (“Tax Sharing Agreement”) and shall be increased or decreased, as appropriate to reflect interest payable to the Internal Revenue Service in connection with such repayments.

§3.          Repayment and Optional Prepayment.

§3.1        Hallmark shall offset any Estimated Crown Tax Benefits (as defined in the Tax Sharing Agreement) first against accrued and unpaid interest and then to the unpaid principal balance of this Note until the earlier of such time as the balance equals zero or the Maturity Date.

§3.2        The Company shall pay to Hallmark a single principal payment together with all accrued and unpaid interest on the Maturity Date.

§3.3        The 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 to the extent permitted by that certain Credit and Security Agreement dated as of August 31, 2001 with JPMorgan Chase as agent (“Credit Agreement”).

§4.          Events of Default.

Each of the following shall constitute an event of default hereunder (an “Event of Default”):

(i)            The failure of the Company to make any payment of principal or interest hereunder 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 Hallmark;

(ii)           The Company shall be in default with respect to the Credit Agreement or with respect to that certain Note Purchase Agreement dated as of August 1, 2003 by and between Crown Media Holdings, Inc. and HC Crown Corp or with respect to any other Note by the Company payable to HC Crown Corp or an affiliate thereof and such default under such facility could accelerate the maturity of the indebtedness thereunder and such default is not cured or waived within the grace period provided therein.

§5.          Remedies.

Upon the occurrence of an Event of Default and at any time thereafter during the continuance of such Event of Default hereunder, Hallmark 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 the Company.

§6.          Subordination.

This Note and payment hereunder shall be subject to the subordination provisions of that certain Subordination and Support Agreement dated as of August 31, 2001 among the Company, Hallmark and JP Morgan Chase as agent for the lenders under the Credit Agreement.

§7.          Waivers.

§7.1        The failure by Hallmark 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, Hallmark 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 Hallmark, 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 Hallmark’s rights or remedies with respect to any subsequent event.

§7.2        The Company expressly waives 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 the Company.

§7.3        The Company hereby waives and releases all errors, defects and imperfections in any proceeding instituted by Hallmark under the terms hereof as well as all benefits that might accrue to the Company 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 the Company agrees 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 Hallmark.

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§8.          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 or to such other address as indicated by such party in writing:

§9.          Assignability.

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

§10.        Modifications.

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

§11.        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.

§12.        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.

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§13.        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.

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

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