Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CROWN MEDIA HOLDINGS INC | mainbody.htm |
| EX-3.3 - FORM OF THIRD CERT OF INC - CROWN MEDIA HOLDINGS INC | thirdcert.htm |
| EX-2.2 - FORM OF MERGER HEH - CROWN MEDIA HOLDINGS INC | mergerheh.htm |
| EX-3.1 - FORM OF SECOND CERT OF INC - CROWN MEDIA HOLDINGS INC | secondcert.htm |
| EX-2.1 - FORM OF MERGER HEIC - CROWN MEDIA HOLDINGS INC | mergerheic.htm |
| EX-10.3 - FORM OF AMENDMENT NO. 2 TO TAX SHARING - CROWN MEDIA HOLDINGS INC | taxsharing.htm |
| EX-10.1 - MASTER RECAPITALIZATION AGREEMENT - CROWN MEDIA HOLDINGS INC | masterrecap.htm |
| EX-3.2 - FORM OF CERTIFICATE OF DESIGNATION - CROWN MEDIA HOLDINGS INC | certpreferred.htm |
| EX-10.2 - FORM OF CREDIT AGREEMENT - CROWN MEDIA HOLDINGS INC | creditagreement.htm |
| EX-4.2 - FORM OF REGISTRATION RIGHTS AGREEMENT - CROWN MEDIA HOLDINGS INC | registrationrights.htm |
| EX-4.1 - FORM OF STOCKHOLDERS AGREEMENT - CROWN MEDIA HOLDINGS INC | stockholdersagreement.htm |
Exhibit
99.1
Crown
Media Holdings Enters Into Agreement For
Recapitalization
STUDIO CITY, CA – March 1,
2010 - Crown Media Holdings, Inc. (NASDAQ: CRWN), owner and operator of
Hallmark Channel and Hallmark Movie Channel, today announced that the Company
has approved and executed definitive agreements relating to a recapitalization
of the Company.
On
February 9, 2010, the Special Committee of the Board and HCC approved and
executed a Recapitalization Term Sheet, representing non-binding terms of
recapitalization transactions for the Company. On February 26, 2010,
the Company entered into the Master Recapitalization Agreement with Hallmark
Cards, H C Crown Corp. (“HCC”) and related entities that provides for the
recapitalization transactions (the “Recapitalization”).
The
Recapitalization transactions include, among other things, $315.0 million
principal amount of HCC debt being restructured into new debt instruments,
$185.0 million principal amount of HCC debt being converted into convertible
preferred stock of the Company, Class B Common Stock being converted into Class
A Common Stock with Class A Common Stock becoming the only authorized and
outstanding common stock of the Company, and the balance of HCC debt, which was
approximately $600 million at December 31, 2009, being converted into shares of
Class A Common Stock of the Company. Upon execution of the Master
Recapitalization Agreement, the automatic termination of the waiver under the
existing Amended and Restated Waiver and Standby Purchase Agreement with
Hallmark Cards, Incorporated and HCC was extended until August 31, 2010; the
waiver defers payment dates on certain HCC debts.
“We
believe the consummation of the Recapitalization will be a very positive
development for the Company and with the significant reduction in our
outstanding debt, will help us maintain the operating health of our company,”
noted Bill Abbott, President and CEO of Crown Media.
Other
aspects of the Recapitalization concern a Credit Agreement for the new debt, an
amendment to the Tax Sharing Agreement with Hallmark Cards, a registration
rights agreement, mergers of two intermediate holding companies with the
Company, efforts to extend or replace the Company’s revolving line of credit,
Hallmark Cards’ willingness to guarantee $30.0 million of a revolving line of
credit, and a standstill agreement of Hallmark entities pursuant to which such
entities agree not to acquire, through December 31, 2013, additional shares of
Class A Common Stock of the Company, subject to certain exceptions, and agree to
certain restrictions on their ability to sell or transfer shares of Class A
Common Stock of the Company until December 31, 2013 and, subject to lesser
restrictions, until December 31, 2020.
Each of
the Company (subject to approval by the Special Committee) and HCC has the right
to terminate the Master Recapitalization Agreement at any time after the later
of (x) June 30, 2010 and (y) 45 days following receipt of notice that the
information statement filed by the Company will not be reviewed by the SEC or
that the SEC staff has no further comments thereon, if the Recapitalization has
not been consummated prior to that date.
Certain
aspects of the Recapitalization require stockholder
approval. Hallmark Entertainment Holdings, Inc. and certain Hallmark
Cards’ affiliates as direct or indirect owners of more than a majority of the
Company’s voting stock have stated in the Master Recapitalization Agreement
their written consents to these matters in lieu of holding a meeting of the
Company’s stockholders. No vote of other stockholders will be
requested or required. The closing of the Recapitalization cannot
occur until 20 calendar days after an information statement required by
regulations of the SEC is sent to the stockholders of the Company, or if such
information statement is furnished by sending a Notice of Internet Availability,
until 40 calendar days after such notice is sent to the stockholders of the
Company.
Pursuant
to a stipulation relating to a lawsuit filed in connection with the initial
recapitalization proposal of HCC, the Company may not close the Recapitalization
for a period of seven weeks from the date of providing copies of the definitive
Recapitalization agreements to the plaintiff (March 1, 2010).
The
definitive agreements relating to the Recapitalization and a summary of the
Recapitalization are part of the Current Report on Form 8-K filed today with the
SEC by the Company.
About
Crown Media Holdings
Crown
Media Holdings, Inc. (NASDAQ:CRWN) owns and operates cable television channels
dedicated to high quality, broad appeal, entertainment
programming. The Company currently operates and distributes Hallmark
Channel in both high definition (HD) and standard definition (SD) to nearly 90
million subscribers in the U.S. Hallmark Channel consistently ranks
among the highest-rated cable networks and is one of the nation’s leading
networks in providing quality family programming. Crown Media also
operates a second 24-hour linear channel, Hallmark Movie Channel, available in
both HD and SD, featuring the greatest family movies of all
time. Significant investors in Crown Media Holdings include: Hallmark
Entertainment Holdings, Inc., a subsidiary of Hallmark Cards, Incorporated,
Liberty Media Corp., and J.P. Morgan Partners (BHCA), LP, each through their
investments in Hallmark Entertainment Investments Co.; VISN Management Corp., a
for-profit subsidiary of the National Interfaith Cable Coalition: and The
DIRECTV Group, Inc.
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; our ability to address our liquidity needs; our
incurrence of losses; our substantial indebtedness affecting our financial
condition and results; and other risks detailed in the Company’s filings with
the Securities and Exchange Commission, including the Risk Factors stated in the
Company’s most recent 10-K and 10-Q Reports. 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.
Contacts:
Mindy
Tucker
IR
Focus
914.725.8128
mindy@irfocusllc.com
Mark
Kern
Crown
Media
818.755.2626
markkern@hallmarkchannel.com
Nancy
Carr
Crown
Media
818.755.2643
nancycarr@hallmarkchannel.com