UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. 18)
CROWN MEDIA HOLDINGS, INC.
(Name of Issuer)
Class A Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
228411 10 4
(CUSIP Number)
Brian Gardner, Esq.
Executive Vice President and General Counsel
Hallmark Cards, Incorporated
Department 339
2501 McGee
Kansas City, Missouri 64108
(816) 274-5583
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
April 6, 2016
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-l(e), 240.13d-l(f) or 240.13d-1(g), check the following box. ¨
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent.
The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
1. | Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
Hallmark Cards, Incorporated | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) x (b) ¨
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3. | SEC Use Only ¨
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4. | Source of Funds (See Instructions)
OO | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6. | Citizenship or Place of Organization
Missouri | |||||
Number of Shares Beneficially Owned by Each Reporting Person With
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7. | Sole Voting Power
-0- | ||||
8. | Shared Voting Power
324,885,516 shares of Class A Common Stock | |||||
9. | Sole Dispositive Power
-0- | |||||
10. | Shared Dispositive Power
324,885,516 shares of Class A Common Stock | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
324,885,516 shares of Class A Common Stock | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13. | Percent of Class Represented by Amount in Row (11)
90.3% | |||||
14. | Type of Reporting Person (See Instructions)
CO |
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1. | Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
H.A., LLC | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) x (b) ¨
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3. | SEC Use Only ¨
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4. | Source of Funds (See Instructions)
OO | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6. | Citizenship or Place of Organization
Delaware | |||||
Number of Shares Beneficially Owned by Each Reporting Person With
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7. | Sole Voting Power
-0- | ||||
8. | Shared Voting Power
324,885,516 shares of Class A Common Stock | |||||
9. | Sole Dispositive Power
-0- | |||||
10. | Shared Dispositive Power
324,885,516 shares of Class A Common Stock | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
324,885,516 shares of Class A Common Stock | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13. | Percent of Class Represented by Amount in Row (11)
90.3% | |||||
14. | Type of Reporting Person (See Instructions)
OO |
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1. | Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
HMK Holdings, Inc. | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) x (b) ¨
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3. | SEC Use Only ¨
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4. | Source of Funds (See Instructions)
OO | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6. | Citizenship or Place of Organization
Delaware | |||||
Number of Shares Beneficially Owned by Each Reporting Person With
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7. | Sole Voting Power
-0- | ||||
8. | Shared Voting Power
324,885,516 shares of Class A Common Stock | |||||
9. | Sole Dispositive Power
-0- | |||||
10. | Shared Dispositive Power
324,885,516 shares of Class A Common Stock | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
324,885,516 shares of Class A Common Stock | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13. | Percent of Class Represented by Amount in Row (11)
90.3% | |||||
14. | Type of Reporting Person (See Instructions)
CO |
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1. | Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
H C Crown, LLC | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) x (b) ¨
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3. | SEC Use Only ¨
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4. | Source of Funds (See Instructions)
OO | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6. | Citizenship or Place of Organization
Delaware | |||||
Number of Shares Beneficially Owned by Each Reporting Person With
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7. | Sole Voting Power
-0- | ||||
8. | Shared Voting Power
324,885,516 shares of Class A Common Stock | |||||
9. | Sole Dispositive Power
-0- | |||||
10. | Shared Dispositive Power
324,885,516 shares of Class A Common Stock | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
324,885,516 shares of Class A Common Stock | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13. | Percent of Class Represented by Amount in Row (11)
90.3% | |||||
14. | Type of Reporting Person (See Instructions)
OO |
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1. | Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
CM Merger Co. | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) x (b) ¨
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3. | SEC Use Only ¨
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4. | Source of Funds (See Instructions)
OO | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ¨
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6. | Citizenship or Place of Organization
Delaware | |||||
Number of Shares Beneficially Owned by Each Reporting Person With
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7. | Sole Voting Power
-0- | ||||
8. | Shared Voting Power
324,885,516 shares of Class A Common Stock | |||||
9. | Sole Dispositive Power
-0- | |||||
10. | Shared Dispositive Power
324,885,516 shares of Class A Common Stock | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
324,885,516 shares of Class A Common Stock | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ¨
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13. | Percent of Class Represented by Amount in Row (11)
90.3% | |||||
14. | Type of Reporting Person (See Instructions)
OO |
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This Schedule 13D/A Amendment No. 18 (this Amendment) amends and supplements the Schedule 13D filed previously by Hallmark Cards, Incorporated, H.A., LLC (formerly H.A., Inc.), HMK Holdings, Inc., H C Crown, LLC (formerly H C Crown Corp.), Hallmark Cards GmbH, and Blue Holding Company, LLC, jointly with respect to the securities of the Issuer (the Schedule 13D). Capitalized terms used but not otherwise defined herein have the meanings set forth in the Schedule 13D.
As a result of the Share Contribution (as defined in Item 3 of this Schedule 13D/A), Hallmark Cards GmbH and Blue Holding Company are no longer beneficial owners of securities of the Issuer, as that term is defined in 17 CFR § 240.13d-5. Therefore, neither Hallmark Cards GmbH nor Blue Holding Company, LLC, are Reporting Persons in this Schedule 13D/A.
ITEM 2. IDENTITY AND BACKGROUND.
Item 2 of the Schedule 13D, as it has been amended from time to time, is hereby further amended and restated by deleting the entirety of the text therof and replacing it with the following:
(a) - (c) and (f): This Schedule 13D/A is being filed by Hallmark Cards, Incorporated (Hallmark Cards), a Missouri corporation, H.A., LLC (HALLC), a Delaware limited liability company and a wholly-owned subsidiary of Hallmark Cards (formerly H.A., Inc., a Delaware corporation), HMK Holdings, Inc. (HMK), a Delaware corporation and wholly-owned subsidiary of HALLC, H C Crown, LLC (HCC), a Delaware limited liability company and a wholly-owned subsidiary of HMK (formerly H C Crown Corp., a Delaware corporation), and CM Merger Co. (Merger Sub and, together with Hallmark Cards, HALLC, HMK, and HCC, the Reporting Persons), a Delaware corporation and wholly-owned subsidiary of HCC. Each of the Reporting Persons has its principal executive office at 2501 McGee, Kansas City, Missouri 64108. Hallmark Cards principal business is the manufacture and distribution of personal expression products. HALLCs principal business is holding shares of HMK Holdings, Inc. and debt securities and other investments in other entities. HMKs principal business is holding shares of HCC and debt securities and other investments in other entities. HCCs principal business is holding shares of the Merger Sub and debt securities and other investments in other entities. Merger Subs principal business is holding shares of the Issuer. The name, business address, present principal occupation or employment, and citizenship of each director and executive officer of the Reporting Persons is set forth in Schedule I hereto and is incorporated herein by reference.
(d) and (e): During the last five years, none of the Reporting Persons, nor, to the knowledge of the Reporting Persons, any of the persons listed on Schedule I hereto, (1) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (2) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On April 6, 2016, pursuant to a Purchase Agreement, dated as of April 6, 2016 (the Purchase Agreement), by and between Hallmark Cards and Hallmark Cards GmbH (HC Germany), a German company and wholly-owned subsidiary of Hallmark Cards, HC Germany sold 40,000,000 shares (the Repatriated Shares) of the Issuers Class A Common Stock (the Common Stock) in exchange for a promissory note issued by Hallmark Cards to HC Germany. Immediately thereafter, Hallmark Cards contributed the Repatriated Shares to HALLC pursuant to a Contribution Agreement, dated as of April 6, 2016 (the Hallmark Cards-HALLC Contribution Agreement), by and between Hallmark Cards and HALLC. Immediately thereafter, HALLC contributed the Repatriated Shares to HMK pursuant to a Contribution Agreement, dated as of April 6, 2016 (the HALLC-HMK Contribution Agreement), by and between HALLC and HMK. Immediately thereafter, HMK contributed the Repatriated Shares to HCC pursuant to a Contribution Agreement, dated as of April 6, 2016 (the HMK-HCC Contribution Agreement), by and between HMK and HCC. Immediately thereafter, HCC contributed the Repatriated Shares, as well as the 284,855,516 shares of Common Stock already held by HCC (together with the Repatriated Shares, the Reaggregated Shares), to Merger Sub pursuant to a Contribution Agreement, dated as of April 6, 2016 (the HCC-Merger Sub Contribution Agreement and, together with the Purchase Agreement, the Hallmark Cards-HALLC Contribution Agreement, the HALLC-HMK Contribution Agreement, and the HMK-HCC Contribution Agreement, the Transfer Documents), by and between HCC and Merger Sub.
As a result of the transactions contemplated by the Transfer Documents (the Share Contribution) Merger Sub is the direct owner of the Reaggregated Shares.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Schedule 13D is hereby amended and supplemented by adding the following to the end thereof:
Short Form Merger
As already stated, on March 8, 2016, Hallmark Cards delivered a letter to the Board of Directors of the Issuer setting forth the intention of Hallmark to acquire all of the shares of the Issuers Common Stock not owned by Hallmark and its affiliates at a price of $5.05 per share pursuant to a short-form merger under Delaware law (the Short Form Merger). As a result of the Share Contribution, Merger Sub owns 90.3% of the issued and outstanding shares of the Issuer and, pursuant to Section 253 of the Delaware General Corporate Law, is entitled to effect the Short Form Merger without the approval of or action by the board of directors of the Issuer or the Issuers other stockholders.
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Pursuant to the planned Short Form Merger, Merger Sub will merge with the Issuer, and the Issuer, as the surviving entity, will become a wholly-owned subsidiary of Hallmark Cards and its affiliates. Around the time of the Short Form Merger, the Reporting Persons intend to take all actions necessary to have the Issuers securities delisted from the NASDAQ stock exchange and deregistered under the Act. The Reporting Persons will consummate the Short Form Merger no sooner than 20 days after mailing the required disclosure documents pursuant to Rule 13e-3(e) and (f) of 17 CFR § 240.13e-3.
The Reporting Persons currently intend to proceed with the Short Form Merger, but reserve the right to formulate other plans and/or make other proposals, and take such actions with respect to their investment in the Issuer, including any or all of the actions set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D, or dispose of all or a portion of their investment in the Issuer or acquire additional Common Stock in privately negotiated transactions or in the open market. The Reporting Persons may at any time reconsider and change their plans or proposals relating to any of the foregoing. Accordingly, the Reporting Persons may ultimately decide not to proceed with the Short Form Merger.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b): Immediately following the Share Contribution, (i) Merger Sub directly owns 324,885,516 shares of Class A Common Stock, which comprises 90.3% of the outstanding shares of Class A Common Stock of the Issuer. Hallmark Cards directly owns no shares of Common Stock, but shares dispositive and voting power over the shares of Common Stock owned by Merger Sub, which constitutes 324,885,516 shares of the Issuers Common Stock and 90.3% of the outstanding shares of the Issuers Common Stock. These percentages are based on 359,675,936 shares of the Issuers Common Stock outstanding as of February 16, 2016, as reported in the Issuers Form 10-K filed on February 19, 2016 for the year ended December 31, 2015. The information requested by (a)-(b) of this Item 5 for each director and executive officer of Hallmark Cards, HMK, and Merger Sub, and each executive officer of HALLC and HCC is set forth in Schedule II hereto and is incorporated herein by reference.
(c): See Items 3 and 4 above.
Except as described in this Item 5(c), neither of the Reporting Persons, nor, to the best knowledge of the Reporting Persons, any of their directors or executive officers, has effected any transactions in shares of Common Stock during the past 60 days.
(d): None
(e): Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
Item 6 of the Schedule 13D, as it has been amended from time to time, is hereby further amended and supplemented as follows:
Purchase Agreement, dated as of April 6, 2016, by and between Hallmark Cards and HC Germany. See Items 3 and 4 above.
Promissory Note, dated as of April 6, 2016, by and between Hallmark Cards and HC Germany. See Items 3 and 4 above.
Contribution Agreement, dated as of April 6, 2016, by and between Hallmark Cards and HALLC. See Items 3 and 4 above.
Contribution Agreement, dated as of April 6, 2016, by and between HALLC and HMK. See Items 3 and 4 above.
Contribution Agreement, dated as of April 6, 2016, by and between HMK and HCC. See Items 3 and 4 above.
Contribution Agreement, dated as of April 6, 2016, by and between HCC and Merger Sub. See Items 3 and 4 above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(1) | Joint Filing Agreement, dated as of April 8, 2016, by and among Hallmark Cards, HALLC, HMK, HCC, and Merger Sub. |
(2) | Purchase Agreement, dated as of April 6, 2016, by and between Hallmark Cards and HC Germany. |
(3) | Promissory Note, dated as of April 6, 2016, by and between Hallmark Cards and HC Germany. |
(4) | Contribution Agreement, dated as of April 6, 2016, by and between Hallmark Cards and HALLC. |
(5) | Contribution Agreement, dated as of April 6, 2016, by and between HALLC and HMK. |
(6) | Contribution Agreement, dated as of April 6, 2016, by and between HMK and HCC. |
(7) | Contribution Agreement, dated as of April 6, 2016, by and between HCC and Merger Sub. |
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SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct.
Dated: April 8, 2016 | HALLMARK CARDS, INCORPORATED | |||||
By: |
/s/ James Shay | |||||
Name: |
James Shay | |||||
Title: |
Executive Vice President-Chief Financial Officer | |||||
H.A., LLC | ||||||
By: |
/s/ Brian E. Gardner | |||||
Name: |
Brian E. Gardner | |||||
Title: |
Vice President | |||||
HMK HOLDINGS, INC. | ||||||
By: |
/s/ Brian E. Gardner | |||||
Name: | Brian E. Gardner | |||||
Title: | Vice President | |||||
H C CROWN, LLC | ||||||
By: |
/s/ Deanne R. Stedem | |||||
Name: | Deanne R. Stedem | |||||
Title: | Vice President | |||||
CM MERGER CO. | ||||||
By: |
/s/ Deanne R. Stedem | |||||
Name: | Deanne R. Stedem | |||||
Title: | Vice President |
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SCHEDULE I
The name and present principal occupation of each of the directors and executive officers of Hallmark Cards, Incorporated; H.A., LLC; HMK Holdings, Inc.; H C Crown, LLC; and CM Merger Co. are set forth below. The business address for each of the directors and executive officers of Hallmark Cards, Incorporated is c/o Hallmark Cards, Incorporated, 2501 McGee, Kansas City, Missouri 64108. The business address for each of the executive officers of H.A., LLC is c/o H.A., LLC, 2501 McGee, Kansas City, Missouri 64108. The business address for each of the directors and executive officers of HMK Holdings, Inc. is c/o HMK Holdings, Inc., 2501 McGee, Kansas City, Missouri 64108. The business address for each of the executive officers of H C Crown, LLC is c/o H C Crown, LLC, 2501 McGee, Kansas City, Missouri 64108. The business address for each of the directors and executive officers of CM Merger Co. is c/o CM Merger Co. is 2501 McGee, Kansas City, Missouri 64108. All the directors and executive officers listed on this Schedule I are United States citizens.
HALLMARK CARDS, INCORPORATED
Name |
Title and Occupation | |
Nancye L. Green | Director; President of Donovan/Green, Inc. | |
Frederick B. Hegi, Jr. | Director; Founding Partner, Wingate Partners | |
Timothy B. Smucker | Director; Chairman and Co-Chief Executive Officer of the J.M. Smucker Company | |
Claire Hughes Johnson | Director; Chief of Business Operations, Stripe; Former Vice President, Google Offers, Google, Inc. | |
Donald J. Hall, Jr. | Director; Chairman and Chief Executive Officer | |
David E. Hall | Director; President | |
Donald J. Hall | Chairman Emeritus | |
Keith Kotel | President Hallmark Home and Gifts; Former President of Kid Brands, Inc. (LaJobi Division) | |
Michael Perry | President Hallmark Greetings; Former President and Chief Executive Officer of Crayola LLC | |
John Watson | President Hallmark Retail; Former Chairman and Chief Executive Officer of Edwin Watts Golf | |
James Shay | Executive Vice President Chief Financial Officer; Former Senior Vice President and Chief Financial Officer of Great Plains Energy and KCP&L | |
Brian E. Gardner | Executive Vice President General Counsel | |
Stacey Paine | Executive Vice President Real Estate | |
Sabrina Wiewel | Senior Vice President Customer Development | |
William Guibor | Senior Vice President Chief Operating Officer-Hallmark Retail | |
Steve Hawn | Senior Vice President Corporate Strategy and Development | |
Molly Biwer | Senior Vice President Public Affairs and Communications; Former Vice President, Communications and Public Relations of Carlson | |
Ellen Junger | Senior Vice President Brand Development | |
Robert C. Bloss | Senior Vice President Human Resources | |
Evon Jones | Senior Vice President Technology and Business Enablement | |
Beth Ward | Senior Vice President Supply Chain; Former Managing Director of Asia Pacific Procurement | |
Daniel S. Krouse | Vice President Logistics and Indirect Procurement |
H.A., LLC
Name |
Title and Occupation | |
Susan Glass | President | |
Steve Collins | Vice President | |
Nancy Hecker | Vice President, Treasurer | |
Jeff McMillen | Vice President, Investment Officer | |
Brian E. Gardner | Vice President | |
Dwight C. Arn | Vice President |
HMK HOLDINGS, INC.
Name |
Title and Occupation | |
Susan Glass | Director and President | |
Steve Collins | Director and Vice President | |
Nancy Hecker | Director and Treasurer | |
Dwight C. Arn | Director and Vice President | |
Deanne R. Stedem | Director and Vice President | |
Jeff McMillen | Vice President, Investment Officer | |
Brian E. Gardner | Vice President |
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H C CROWN, LLC
Name |
Title and Occupation | |
Susan Glass | President | |
Steve Collins | Vice President | |
Jeff McMillen | Vice President, Investment Officer | |
Brian E. Gardner | Vice President | |
Dwight C. Arn | Vice President | |
Deanne R. Stedem | Vice President |
CM MERGER CO.
Name |
Title and Occupation | |
Brian E. Gardner | Director and President | |
Deanne R. Stedem | Director and Vice President | |
Dwight C. Arn | Vice President | |
Jeff McMillen | Treasurer | |
Vicki E. Young | Secretary |
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SCHEDULE II
To the knowledge of the Reporting Persons, listed below are the names of the executive officers and directors who beneficially own Common Stock, along with the number of shares each such person beneficially owns. To the knowledge of the Reporting Persons, the persons listed below are the only persons on Schedule I who beneficially own Common Stock. To the knowledge of the Reporting Persons except as noted below, (a) each person listed below has the sole power to vote or direct to vote and dispose or direct to dispose those shares of Common Stock beneficially owned by such person and (b) each person beneficially owns shares of Common Stock representing less than 1% of the Class A Common Stock outstanding.
Name |
Class A Common Stock |
|||
David E. Hall (1) |
324,888,016 | |||
Donald J. Hall, Jr. (1) |
324,888,016 | |||
Deanne R. Stedem |
1,000 |
(1) | Donald J. Hall, Jr. and David E. Hall each may be deemed to be a beneficial owner of the shares beneficially owned by Hallmark Cards, Incorporated because each is a co-trustee of a voting trust which controls all of the voting securities of Hallmark Cards, Incorporated and each is a director and an officer of Hallmark Cards, Incorporated. Each disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein. |
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Exhibit 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the shares of Class A Common Stock, par value $0.01 per share, of Crown Media Holdings, Inc., and further agree that this Joint Filing Agreement (this Agreement) be included as an Exhibit thereto. In addition, each party to this Agreement expressly authorizes each other party to this Agreement to file on its behalf any and all amendments to such Statement.
Dated: April 8, 2016 | HALLMARK CARDS, INCORPORATED | |||||
By: | /s/ James Shay | |||||
Name: | James Shay | |||||
Title: | Executive Vice President-Chief Financial Officer | |||||
H.A., LLC | ||||||
By: | /s/ Brian E. Gardner | |||||
Name: | Brian E. Gardner | |||||
Title: | Vice President | |||||
HMK HOLDINGS, INC. | ||||||
By: | /s/ Brian E. Gardner | |||||
Name: | Brian E. Gardner | |||||
Title: | Vice President | |||||
H C CROWN, LLC | ||||||
By: | /s/ Deanne R. Stedem | |||||
Name: | Deanne R. Stedem | |||||
Title: | Vice President | |||||
CM Merger Co. | ||||||
By: | /s/ Deanne R. Stedem | |||||
Name: | Deanne R. Stedem | |||||
Title: | Vice President |
Exhibit 2
PURCHASE AGREEMENT
This Purchase Agreement dated as of April 6, 2016 is by and between Hallmark Cards, Incorporated (Hallmark) and Hallmark Cards GmbH (HC Germany).
WHEREAS, Hallmark desires to purchase and HC Germany desires to sell 40 million shares of Class A Common Stock of Crown Media Holdings, Inc. (the Stock); and
WHEREAS, Hallmark acknowledges that the Stock is subject to the terms and conditions of that certain Stockholders Agreement dated as of June 29, 2010 by and among H C Crown, LLC, Hallmark and Crown Media Holdings, Inc. (the Stockholders Agreement); and
WHEREAS, the parties acknowledge that the stock will ultimately be contributed to a subsidiary of Hallmark.
NOW THEREFORE, the parties hereto mutually agree as follows:
1. Purchase. On the Closing Date and upon receipt of the Purchase Price and subject to the terms and conditions set forth herein, HC Germany will hereby sell, assign, grant, and convey and Hallmark will hereby acquire good and marketable title to the Stock, free and clear of all encumbrances and liens, except as set forth herein. The Closing Date shall be a date to be mutually agreed by the parties.
2. Purchase Price. The Purchase Price shall be a Promissory Note in an amount equal to 40 million multiplied times Five Dollars and Five Cents ($5.05) (Share Price) as converted into Euros on the Closing Date; provided, however, that if at any time in the next 90 days, Hallmark, or any of its subsidiaries, agrees to pay a price per share higher than the Share Price to acquire Class A Common Stock of Crown Media Holdings, Inc., then the Share Price shall be adjusted to reflect the higher price (the Adjusted Share Price) and the Promissory Note shall be amended to appropriately reflect such Adjusted Share Price. Such Promissory Note shall be substantially in the form attached hereto as Exhibit A.
3. Restrictions on Stock. Hallmark hereby acknowledges that the Stock will continue to be subject to the Stockholders Agreement.
4. Stock Power. Upon closing of the transaction contemplated by this agreement, HC Germany agrees to execute a Stock Power assigning the Stock to Hallmark or Hallmarks designee, substantially in the form attached hereto as Exhibit B.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
HALLMARK CARDS, INCORPORATED | ||
By: | /s/ Brian E. Gardner | |
Title: | Executive Vice President | |
HALLMARK CARDS GmbH | ||
By: | /s/ James Shay | |
Title: | Managing Director |
Exhibit A
PROMISSORY NOTE
Date: | As of April , 2016 | Amount: | Euro |
§1. | Promise to Pay. |
For value received, Hallmark Cards, Incorporated (Hallmark) hereby promises to pay to the order of Hallmark Cards GmbH (HC Germany) at such place as HC Germany may, from time to time specify in writing, the principal and interest amount outstanding under this Note, together with all fees and accrued interest no later than five (5) years from the date hereof (Maturity Date) and in accordance with Section 2 hereof. The initial principal amount of this Promissory Note shall be denominated in Euros as set forth above.
§2. | Interest. |
§2.1 Loans provided hereunder shall bear interest at a rate equal to the LIBOR Rate for the Interest Period in effect, plus 125 basis points. The initial Interest Period will commence on the effective date hereof and end on the numerically corresponding day in the calendar month that is three months hereafter. Each subsequent Interest Period will commence immediately upon the termination of the prior Interest Period and will end on the numerically corresponding day in the calendar month that is three months thereafter. The LIBOR Rate means the London interbank offered rate administered by the ICE Benchmark Administration (or any successor) for loans denominated in Euros for a length equal to each Interest Period; provided that if any rate for Euro loans is less than zero, such rate shall be deemed to be zero for purposes of this Note.
§2.2 Interest shall be calculated on the basis of a 365 day year and the actual number of days elapsed.
§2.3 Interest shall accrue through and be paid or added to the principal at the end of each Interest Period.
§3. | Repayment and Optional Prepayment. |
§3.1 Hallmark shall pay to HC Germany a single principal payment together with all accrued and unpaid interest on the Maturity Date.
§3.2 Hallmark 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.
§4. | Events of Default. |
The following shall constitute an event of default hereunder (an Event of Default):
(i) | the failure of Hallmark 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 HC Germany; or |
(ii) | Hallmark or any of its subsidiaries, individually or collectively, shall fail to make any payment of principal or interest in respect of any Material Indebtedness, and such failure shall continue beyond any applicable grace or notice period, or any event or condition occurs that results in any Material Indebtedness to become due or otherwise accelerated. Material Indebtedness shall mean any obligation, debt or guaranty in an amount exceeding $50,000,000. |
§5. | Remedies. |
Upon the occurrence of an Event of Default, and at any time thereafter during the continuance of such Event of Default hereunder, HC Germany 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 Hallmark.
§6 | Waivers. |
§6.1 The failure by HC Germany 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 Germany 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 Germany, 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 Germanys rights or remedies with respect to any subsequent event.
§6.2 Hallmark 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 Hallmark.
§6.3 Hallmark hereby waives and releases all errors, defects and imperfections in any proceeding instituted by HC Germany under the terms hereof as well as all benefits that might accrue to Hallmark 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 Hallmark 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 HC Germany.
§7. | 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:
Hallmark: | Hallmark Cards, Incorporated | |
2501 McGee, MD #342 | ||
Kansas City, MO 64108 | ||
ATTN: Chief Financial Officer | ||
With a copy to: | Hallmark Cards, Incorporated | |
2501 McGee, MD #339 | ||
Kansas City, MO 64108 | ||
ATTN: General Counsel | ||
HC Germany: | Hallmark Cards GmbH | |
c/o James Shay, Managing Director | ||
2501 McGee, MD #342 | ||
Kansas City, MO 64108 |
§8. | Assignability. |
This Agreement shall be binding upon and inure to the benefit of Hallmark and HC Germany and their respective successors and assigns.
§9. | Modifications. |
This Note may be modified only in a writing signed by Hallmark and HC Germany. Any amendment, extension of time or any other modification shall not affect Hallmarks obligations hereunder.
§10. | 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.
§11. | 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 officer has executed this Note as of the day and year first above written thereby legally binding such party to the terms hereof.
HALLMARK CARDS, INCORPORATED | ||
By: |
| |
Name: |
| |
Title: |
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Exhibit B
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Forty Million (40,000,000) shares of Class A Common Stock, par value $.01 per share (the Class A Common Stock) of Crown Media Holdings, Inc. (the Company), standing in the undersigneds name on the books of the Company, and does hereby irrevocably constitute and appoint as attorney to transfer said stock on the books of the Company with full power of substitution in the premises.
Dated: , 2016
HALLMARK CARDS GMBH | ||||
By: |
| |||
Name: | James Shay | |||
Title: | Managing Director |
Exhibit 3
PROMISSORY NOTE
Date: | As of April 6, 2016 | Amount: | Euro 177,270,733 |
§1. | Promise to Pay. |
For value received, Hallmark Cards, Incorporated (Hallmark) hereby promises to pay to the order of Hallmark Cards GmbH (HC Germany) at such place as HC Germany may, from time to time specify in writing, the principal and interest amount outstanding under this Note, together with all fees and accrued interest no later than five (5) years from the date hereof (Maturity Date) and in accordance with Section 2 hereof. The initial principal amount of this Promissory Note shall be denominated in Euros as set forth above.
§2. | Interest. |
§2.1 Loans provided hereunder shall bear interest at a rate equal to the LIBOR Rate for the Interest Period in effect, plus 125 basis points. The initial Interest Period will commence on the effective date hereof and end on the numerically corresponding day in the calendar month that is three months hereafter. Each subsequent Interest Period will commence immediately upon the termination of the prior Interest Period and will end on the numerically corresponding day in the calendar month that is three months thereafter. The LIBOR Rate means the London interbank offered rate administered by the ICE Benchmark Administration (or any successor) for loans denominated in Euros for a length equal to each Interest Period; provided that if any rate for Euro loans is less than zero, such rate shall be deemed to be zero for purposes of this Note.
§2.2 Interest shall be calculated on the basis of a 365 day year and the actual number of days elapsed.
§2.3 Interest shall accrue through and be paid or added to the principal at the end of each Interest Period.
§3. | Repayment and Optional Prepayment. |
§3.1 Hallmark shall pay to HC Germany a single principal payment together with all accrued and unpaid interest on the Maturity Date.
§3.2 Hallmark 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.
§4. | Events of Default. |
The following shall constitute an event of default hereunder (an Event of Default):
(i) | the failure of Hallmark 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 HC Germany; or |
(ii) | Hallmark or any of its subsidiaries, individually or collectively, shall fail to make any payment of principal or interest in respect of any Material Indebtedness, and such failure shall continue beyond any applicable grace or notice period, or any event or condition occurs that results in any Material Indebtedness to become due or otherwise accelerated. Material Indebtedness shall mean any obligation, debt or guaranty in an amount exceeding $50,000,000. |
§5. | Remedies. |
Upon the occurrence of an Event of Default, and at any time thereafter during the continuance of such Event of Default hereunder, HC Germany 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 Hallmark.
§6 | Waivers. |
§6.1 The failure by HC Germany 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 Germany 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 Germany, 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 Germanys rights or remedies with respect to any subsequent event.
§6.2 Hallmark 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 Hallmark.
§6.3 Hallmark hereby waives and releases all errors, defects and imperfections in any proceeding instituted by HC Germany under the terms hereof as well as all benefits that might accrue to Hallmark 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 Hallmark 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 HC Germany.
§7. | 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:
Hallmark: | Hallmark Cards, Incorporated | |
2501 McGee, MD #342 | ||
Kansas City, MO 64108 | ||
ATTN: Chief Financial Officer | ||
With a copy to: | Hallmark Cards, Incorporated | |
2501 McGee, MD #339 | ||
Kansas City, MO 64108 | ||
ATTN: General Counsel | ||
HC Germany: | Hallmark Cards GmbH | |
c/o James Shay, Managing Director | ||
2501 McGee, MD #342 | ||
Kansas City, MO 64108 |
§8. | Assignability. |
This Agreement shall be binding upon and inure to the benefit of Hallmark and HC Germany and their respective successors and assigns.
§9. | Modifications. |
This Note may be modified only in a writing signed by Hallmark and HC Germany. Any amendment, extension of time or any other modification shall not affect Hallmarks obligations hereunder.
§10. | 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.
§11. | 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 officer has executed this Note as of the day and year first above written thereby legally binding such party to the terms hereof.
HALLMARK CARDS, INCORPORATED | ||
By: | /s/ Brian E. Gardner | |
Name: | Brian E. Gardner | |
Title: | Executive Vice President |
Exhibit 4
CONTRIBUTION AGREEMENT
This Contribution Agreement dated as of April 6, 2016, is by and between Hallmark Cards, Incorporated (Hallmark) and H.A., LLC (H.A.).
WHEREAS, each of the Board of Directors of Hallmark and the Managing Member of H.A has authorized this transaction;
NOW, THEREFORE, the parties agree as follows:
1. Contribution. Hallmark hereby makes a capital contribution to H.A. consisting of 40 million shares of Class A Common Stock of Crown Media Holdings, Inc. (the Shares).
2. Restrictions on Shares. H.A. hereby accepts the Shares and acknowledges that the Shares will continue to be subject to that certain Stockholders Agreement dated as of June 29, 2010, by and among Hallmark, Crown Media Holdings, Inc., and other parties, and H.A. agrees to sign a Joinder Agreement with respect thereto.
3. Stock Power. Hallmark agrees to provide a Stock Power assigning the Stock to H.A., or its designee as required.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
HALLMARK CARDS, INCORPORATED | ||
By: | /s/ Brian E. Gardner | |
Title: | Executive Vice President | |
H.A., LLC | ||
By: | /s/ Dwight C. Arn | |
Title: | Vice President |
Exhibit 5
CONTRIBUTION AGREEMENT
This Contribution Agreement dated as of April 6, 2016, is by and between H.A., LLC (H.A.) and HMK Holdings, Inc. (HMK).
WHEREAS, each of the Managing Member of H.A. and the Board of Directors of HMK has authorized this transaction;
NOW, THEREFORE, the parties agree as follows:
1. Contribution. H.A. hereby makes a capital contribution to HMK consisting of 40 million shares of Class A Common Stock of Crown Media Holdings, Inc. (the Shares).
2. Restrictions on Shares. HMK hereby accepts the Shares and acknowledges that the Shares will continue to be subject to that certain Stockholders Agreement dated as of June 29, 2010, by and among Hallmark Cards, Incorporated, Crown Media Holdings, Inc., and other parties, and HMK agrees to sign a Joinder Agreement with respect thereto.
3. Stock Power. H.A. agrees to provide a Stock Power assigning the Stock to HMK or its designee as required.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
H.A., LLC | ||
By: | /s/ Dwight C. Arn | |
Title: | Vice President | |
HMK HOLDINGS, INC. | ||
By: | /s/ Deanne R. Stedem | |
Title: | Vice President |
Exhibit 6
CONTRIBUTION AGREEMENT
This Contribution Agreement dated as of April 6, 2016, is by and between HMK Holdings, Inc. (HMK) and H C Crown, LLC (HCC).
WHEREAS, each of the Board of Directors of HMK and the Managing Member of HCC has authorized this transaction;
NOW, THEREFORE, the parties agree as follows:
1. Contribution. HMK hereby makes a capital contribution to HCC consisting of 40 million shares of Class A Common Stock of Crown Media Holdings, Inc. (the Shares).
2. Restrictions on Shares. HCC hereby accepts the Shares and acknowledges that the Shares will continue to be subject to that certain Stockholders Agreement dated as of June 29, 2010, by and among Hallmark Cards, Incorporated, Crown Media Holdings, Inc., and other parties.
3. Stock Power. HMK agrees to provide a Stock Power assigning the Stock to HCC or its designee as required.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
HMK HOLDINGS, INC. | ||
By: | /s/ Deanne R. Stedem | |
Title: | Vice President | |
H C CROWN, LLC | ||
By: | /s/ Dwight C. Arn | |
Title: | Vice President |
Exhibit 7
CONTRIBUTION AGREEMENT
This Contribution Agreement dated as of April 6, 2016, is by and between H C Crown, LLC (HCC) and CM Merger Co. (CMC).
WHEREAS, each of the Managing Member of HCC and the Board of Directors of CMC has authorized this transaction;
NOW, THEREFORE, the parties agree as follows:
1. Contribution. HCC hereby makes a capital contribution to CMC consisting of 324,885,516 shares of Class A Common Stock of Crown Media Holdings, Inc. as more specifically identified on Schedule I attached hereto (the Shares).
2. Restrictions on Shares. CMC hereby accepts the Shares and acknowledges that the Shares will continue to be subject to that certain Stockholders Agreement dated as of June 29, 2010, by and among HCC, Hallmark Cards, Incorporated and Crown Media Holdings, Inc., (the Stockholders Agreement), and CMC agrees to sign a Joinder Agreement in accordance with the Stockholders Agreement.
3. Stock Power. HCC agrees to provide a Stock Power assigning the Stock to CMC or its designee, as required.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
H C CROWN, LLC | ||
By: | /s/ Dwight C. Arn | |
Title: | Vice President | |
CM MERGER CO. | ||
By: | /s/ Deanne R. Stedem | |
Title: | Vice President |
SCHEDULE I
CROWN MEDIA HOLDINGS STOCK Restricted Holdings (non-certificated)
Class CR1 |
||||||
Held by |
Holder Account |
# of Shares | ||||
H C Crown, LLC |
AC # C-191 | 284,817,085 | ||||
H C Crown, LLC |
AC # C-248 | 68,431 | ||||
Hallmark Cards GmbH |
AC # C-663 | 40,000,000 | ||||
|
|
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Total Shares | 324,885,516 | |||||
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