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-10.1 - MASTER RECAPITALIZATION AGREEMENT - CROWN MEDIA HOLDINGS INC | masterrecap.htm |
| EX-99.1 - PRESS RELEASE - CROWN MEDIA HOLDINGS INC | pressrelease.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
10.3
AMENDMENT
NO. 2
TO
FEDERAL
INCOME TAX SHARING AGREEMENT
THIS
AMENDMENT NO. 2 ( “Amendment No. 2”),
dated as of
[
], 2010 and effective for tax periods beginning on or after January
1, 2010, is to the Federal Income Tax Sharing Agreement (the “Agreement”),
effective March 11, 2003, between Hallmark Cards, Incorporated, a Missouri
corporation (“Hallmark”) and Crown
Media Holdings, Inc. a Delaware corporation (“Crown), as amended by
that certain Amendment No. 1 (“Amendment No. 1”) to
the Agreement, dated August 5, 2003. Capitalized terms used herein
but not defined herein shall have the meaning assigned to them in the
Agreement.
R E C I T A L
S
WHEREAS,
pursuant to Section 9.3(e) of that certain Master Recapitalization Agreement,
dated as of the date hereof, by and among Hallmark, Crown and certain affiliated
entities (the “Master
Recapitalization Agreement”), H C Crown Corp, a Delaware corporation and
an affiliate of Hallmark is required to deliver this Amendment No. 2 to
Crown;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein and in the Master Recapitalization Agreement, the parties hereto hereby
agree as follows:
1. The
parties hereby agree and confirm the provisions added to the Agreement by
Amendment No. 1 shall be deleted in their entirety.
2. The
parties hereby agree and confirm that the conversion of the Hallmark Debt (as
defined in the Master Recapitalization Agreement) into new debt or stock
pursuant to Section 2.2(b)(i)-(iii) of the Master Recapitalization Agreement
shall not be treated as the payment of interest expense in cash to Hallmark
pursuant to the Agreement or Amendment No. 1.
3. The
parties hereby agree and confirm that the first payment pursuant to the
Agreement, as amended by this Amendment No. 2, shall not become due and payable
until after the first full fiscal quarter following the Closing Date, but shall
be made in respect of the period commencing from January 1, 2010 through the
last day of the first full quarter following the Closing Date.
4. The
first sentence of Section 1(b) of the Agreement is hereby amended and restated
in its entirety as follows:
“(b) For
any Inclusion Period, any Crown Tax Benefit shall, subject to the provisions of
Section 2, be allowed as a credit in respect of any future payment due from
Crown to Hallmark in respect of a Crown Tax Liability.”
5. Section
1 of the Agreement is hereby amended by inserting a new subsection (f) and a new
subsection (g) to read as follows:
“(f) Notwithstanding
anything to the contrary in this Agreement, the calculation of the Crown Tax
Liability, Estimated Crown Tax Liability, Estimated Crown Tax Benefit or Crown
Tax Benefit for the Inclusion Period and Tax Year which includes the closing
date of the transactions contemplated by the Master Recapitalization Agreement
shall not include any cancellation of indebtedness income realized by Crown
pursuant to the transactions contemplated by the Master Recapitalization
Agreement.
(g) For
the avoidance of doubt any amounts owed by Crown to Hallmark as of December 31,
2009 which relate to taxes will be included in the Hallmark Debt (as defined in
the Master Recapitalization Agreement), which shall be converted into new debt
or stock pursuant to Section 2.2(b)(i)-(iii) of the Master Recapitalization
Agreement.”
6. Section
2(a)(ii) of the Agreement is hereby amended and restated in its entirety as
follows:
“(ii) Hallmark
shall allow any Estimated Crown Tax Benefit reflected in a statement described
in Section 2(a) as a credit to Crown against any future payment due from Crown
to Hallmark in respect of an Estimated Crown Tax Liability.”
7. Section
2(b) of the Agreement is hereby amended and restated in its entirety as
follows:
“(b) Within
15 Business Days after the date that the Hallmark Group files a consolidated
federal income tax return for a Tax Year that includes an Inclusion Period,
Hallmark will calculate the Crown Tax Liability or Crown Tax Benefit, as the
case may be, for such Inclusion Period and deliver to Crown a statement setting
forth in reasonable detail (I) the amount of such Crown Tax Liability or Crown
Tax Benefit, (II) the amount, if any, by which such Crown Tax Liability or Crown
Tax Benefit exceeds or is less than the aggregate of the Estimated Crown Tax
Liabilities or Estimated Crown Tax Benefits for such Tax Year, (III) the amount,
if any, necessary for Crown to pay Hallmark so that, after such payment and
taking all payments described in Section 2(a) for such Tax Year into account,
Crown will have paid Hallmark 100 percent of such Crown Tax Liability for such
Tax Year (the “True-Up Payment”), and (IV) the computations used to determine
such amounts.
(i) Any
True-Up Payment determined under this section 2(b) will be paid by Crown to
Hallmark in cash within 15 Business Days of the delivery of such
statement. Interest will not be taken into account in computing the
True-Up Payment.
(ii) In
the event there is a Crown Tax Benefit for such Tax Year, such benefit a
“Benefit Balance”, shall be allowed as a credit to Crown against any future
payment due from Crown to Hallmark in respect of a Crown Tax Liability in future
Tax Years. Such Crown Tax Benefit will not accrue
interest. Hallmark will maintain an account showing the cumulative
amount of Benefit Balances for all Inclusion Periods, adjusted for payments and
offsets pursuant to this Section 2 and for adjustments under this Agreement (the
“Cumulative Benefit Balance”). Neither the Benefit Balance for any
Inclusion Period nor the Cumulative Benefit Balance will accrue interest or have
a fixed payment date.
(iii) To
the maximum extent possible, the Cumulative Benefit Balance at any time will be
applied as an offset against the amount of any liability otherwise payable by
Crown to Hallmark as of such time pursuant to this Section 2.
(iv) At
Hallmark’s option, at any time, any or all of the Cumulative Benefit Balance as
of that time may be applied as an offset against any amounts then owed by Crown
to any member of the Hallmark Group under any loan, advance of funds, line of
credit, or any other payable (a “Crown Loan Obligation”), subject to any
limitations under any loan indentures or contracts restricting such
offsets.”
8. The
last sentence of Section 3(a) of the Agreement is hereby amended and restated in
its entirety as follows:
“Within
15 Business Days of Crown’s receipt of such notice, an adjusting payment will be
made by Crown to Hallmark, if necessary, or an adjustment to the amount of the
Cumulative Benefit Balance or balance of the Crown Loan Obligations will be made
in the manner described in Section 3(b).”
9. The
last two sentences of Section 2(a)(iii) and the proviso in the last sentence of
Section 6(a) of the Agreement are hereby deleted in their entirety.
10. The
last sentence of Section 6(b) is hereby amended and restated in its entirety as
follows:
“Any such
allocated interest income to Crown shall be allowed as a credit to Crown against
any future payment due from Crown to Hallmark in respect of a Crown Tax
Liability in future Tax Years by means of an increase to the Cumulative Benefit
Balance.”
11. All
terms and conditions of the Agreement shall remain in full force and effect
except to the extent modified herein.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 to the
Agreement as of the date first written above.
HALLMARK
CARDS INCORPORATED
By:______________________________
Name:
Title:
CROWN
MEDIA HOLDINGS, INC.
By:______________________________
Name:
Title: