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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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MARCH 28, 2001
Date of Report (Date of earliest event reported)
CROWN MEDIA HOLDINGS, INC.
(Exact name of Registrant as Specified in Charter)
Delaware 0-29109 84-1524410
(State or other Jurisdiction of (Commission File Number) (IRS Employer Identification
Incorporation) No.)
6430 S. FIDDLERS GREEN CIRCLE, SUITE 500
GREENWOOD VILLAGE, COLORADO 80111
(Address of Principal Executive Offices)
(303) 220-7990
Registrant's telephone number, including area code
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ITEM 5. OTHER EVENTS
On March 28, 2001 Crown Media Holdings, Inc. ("Crown Media Holdings",
"we", "us", or "our") announced that, effective August 6, 2001, it will
re-launch its United States cable channel, the Odyssey Network, as the Hallmark
Channel. The Odyssey Network is operated by our subsidiary, Odyssey Holdings,
L.L.C. ("Odyssey"). A copy of the press release related to the re-launch is
attached as an exhibit to this Current Report on Form 8-K. We previously
announced the rebranding of our international channel, Hallmark Entertainment
Network, as the Hallmark Channel; we expect the rebranding to be rolled out
during 2001. The Hallmark Entertainment Network is operated by our subsidiary,
Crown Media International, Inc. ("Crown Media International").
We are permitted to use the "Hallmark" and "Hallmark Entertainment"
trademarks in accordance with the terms of a royalty-free trademark license
agreement dated as of March 27, 2001, between a subsidiary of Hallmark Cards,
Incorporated and Odyssey. The term of that agreement expires on August 30, 2003.
Under the agreement, we may use the Hallmark and Hallmark Entertainment
trademarks in the United States only for so long as (a) Hallmark Cards and its
wholly-owned subsidiaries collectively own at least 51% of the voting interest
and at least 35% of the equity interest of Crown Media Holdings and designate a
majority of our Board of Directors and (b) there is no event of default under
the agreement.
Odyssey has the non-exclusive right to use the Hallmark and Hallmark
Entertainment trademarks to promote, market, advertise, distribute and sell a
channel in the United States of high-quality, family-oriented television
programming of a character, nature and quality consistent with the image of
Hallmark Cards. Odyssey also has the non-exclusive right to use the Hallmark
Hall of Fame mark in the United States in connection with the program title "THE
COLLECTION-From the library of the Hallmark Hall of Fame". In the agreement,
Odyssey acknowledges certain limitations on the use of religious programming
from VISN Management Corp., a subsidiary of the National Interfaith Cable
Coalition.
Under the agreement, if the Hallmark subsidiary notifies us in writing
that it has determined that we have failed to comply with the usage standards
set forth in the agreement or have otherwise breached our obligations under the
agreement, we must stop any non-complying activity within 10 days of that notice
or we will be in default of the agreement. We will also be in default if the
Hallmark subsidiary delivers such a written notice to us with respect to its
standards three or more times in any 12-month period. In addition, there will be
a default under the agreement if we fail to make any payments due under loan
agreements within five days of the due date or if our auditors determine that we
are no longer a going concern. The license agreement can be terminated
immediately and without notice if we transfer in any way our rights under the
license agreement, if we have an event of default under the agreement or in
events of bankruptcy, insolvency or similar proceedings.
Except for the uses permitted by the trademark license agreements of
Odyssey and Crown Media International, we are not permitted to use the Hallmark
name alone or with any other names.
Odyssey and the National Interfaith Cable Coalition have also agreed to
amendments to the Odyssey Company Agreement related to programming. As revised,
Odyssey will broadcast 15-1/2 hours per week of "faith and values" and other
programming produced by NICC and its members or co-produced with Hallmark
Entertainment, Inc. NICC will also produce for
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Odyssey's channel, or co-produce with Odyssey or Hallmark Entertainment, Inc.,
up to six holiday specials per year. A portion of the production costs of this
programming will be funded by Odyssey. Odyssey will also assist NICC in
launching and operating a new channel, which will be distributed by digital
satellite and cable. NICC will own the channel, and Odyssey will provide
management and operation services, with some services at no cost and the other
services for fees. The term of the agreement expires on March 26, 2006, but can
be terminated earlier if NICC sells more than 50% of the Crown Media Holdings
shares owned at February 22, 2001. Six months prior to expiration of the
agreement, Odyssey is to negotiate in good faith with NICC regarding a
continuation of the programming commitment. If the parties have not reached
agreement and the programming commitments are not continued at the same levels,
NICC may compel Crown Media Holdings to buy all of NICC's shares of Crown at
their then current market value no later than 60 days following the expiration
of the agreement.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed with this Report:
Exhibit No. Document
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99 Press Release of Hallmark Cards, Inc. and
Crown Media Holdings, Inc. dated March
27, 2001 concerning the re-launch of the
Odyssey Network as the Hallmark Channel
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CROWN MEDIA HOLDINGS, INC.
(Registrant)
Date March 28, 2001 By /s/ William J. Aliber
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William J. Aliber
Executive Vice President and Chief
Financial Officer
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INDEX TO EXHIBITS
Exhibit No. Document
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99 Press Release of Hallmark Cards, Inc. and
Crown Media Holdings, Inc. dated March
27, 2001 concerning the re-launch of the
Odyssey Network as the Hallmark Channel