Exhibit 10.51

 

GUARANTEE AND COLLATERAL AGREEMENT

 

This GUARANTEE AND COLLATERAL AGREEMENT, dated as of December 20, 2011 made by
each of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, the “Grantors”), in favor of WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Administrative Agent (in such capacity, together with
its successors and assigns, the “Administrative Agent”) for the banks and other
financial institutions or entities (the “Lenders”) from time to time parties to
the Credit Agreement, dated as of the date hereof (as amended, supplemented,
restated, amended and restated, refinanced, replaced or otherwise modified from
time to time, the “Credit Agreement”), among SIX FLAGS ENTERTAINMENT
CORPORATION, a Delaware corporation (“Parent”), SIX FLAGS OPERATIONS INC., a
Delaware corporation (“Holdings”), SIX FLAGS THEME PARKS INC., a Delaware
corporation (the “Borrower”), the Administrative Agent and the other agents
named therein, for the ratable benefit of the Secured Parties.

 

W I T N E S S E T H:

 

WHEREAS, concurrently herewith, the Borrower is entering into the Credit
Agreement pursuant to which the Lenders have agreed to make loans and other
credit available to the Borrower;

 

WHEREAS, the Borrower and the other Grantors are engaged in related businesses,
and each Grantor will derive substantial direct and indirect benefit from the
making of the extensions of credit under the Credit Agreement;

 

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective extensions of credit to the Borrower under the Credit Agreement
that the Grantors shall have executed and delivered this Agreement to the
Administrative Agent for the ratable benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, and to induce the Qualified Counterparties to enter into the
Specified Cash Management Agreements and Specified Hedge Agreements, each
Grantor hereby agrees with the Administrative Agent, for the ratable benefit of
the Secured Parties, as follows:

 

Section 1.             DEFINED TERMS

 

1.1           Definitions.  (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms are used herein as defined in the
New York UCC (and if defined in more than one Article of the New York UCC, shall
have the meaning given in Article 9 thereof):  Accounts, Bank, Certificated
Security, Chattel Paper, Commercial Tort Claims, Commodity Accounts, Commodity
Intermediary, Documents, Electronic Chattel Paper, Equipment, Fixtures, General
Intangibles, Goods, Instruments, Inventory, Letter-of-Credit Rights, Securities
Accounts, Securities Entitlement, Supporting Obligations and Uncertificated
Security; provided that none of the foregoing New York UCC terms shall be deemed
to include Excluded Assets.  All references herein to provisions of the Uniform
Commercial Code shall include all successor provisions under any subsequent
version or amendment to any Article of the Uniform Commercial Code.

 

(b)           The following terms shall have the following meanings:

 

“Administrative Agent” shall have the meaning assigned to such term in the
preamble hereto.

 

“Agreement”: this Guarantee and Collateral Agreement, as the same may be
amended, supplemented, restated or otherwise modified from time to time.

 

--------------------------------------------------------------------------------

 

“Borrower” shall have the meaning assigned to such term in the preamble hereto.

 

“Borrower Obligations”: the collective unpaid principal of and interest on
(including, without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans, the
Reimbursement Obligations and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Secured Party, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Specified Hedge
Agreement, any Specified Cash Management Agreement or any other document made,
delivered or given by any Loan Party in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees, charges
and disbursements of counsel to the Administrative Agent or to any Secured Party
that are required to be paid by the Borrower) or otherwise.

 

“Collateral”: as defined in Section 3.

 

“Control Agreement” shall mean an agreement, among any Grantor, any bank,
securities intermediary or commodity intermediary, and the Administrative Agent,
which agreement is in a form reasonably acceptable to the Administrative Agent
and which agreement provides or purports to provide the Administrative Agent
with “control” (within the meaning of Section 9-104 or 9-106 and/or 8-106 of the
UCC, as applicable) over the deposit account(s), securities account(s) or
commodity account(s) described therein, as the same may be amended, modified,
extended, restated, replaced, or supplemented from time to time.

 

“Copyrights”: (i) all works of authorship and copyrights arising under the laws
of the United States, any group of countries, other country or any political
subdivision thereof, whether registered or unregistered and whether published or
unpublished, all registrations thereof, and all applications in connection
therewith, including, without limitation, all registrations and applications in
the United States Copyright Office, including, without limitation, any of the
foregoing listed in Schedule 5, and (ii) the right to obtain all renewals
thereof.

 

“Copyright Licenses”: any written agreement naming any Grantor as licensor or
licensee, granting any right under any Copyright, including, without limitation,
the grant of rights to manufacture, distribute, exploit and sell materials
derived from any Copyright, including, without limitation, any of the foregoing
listed in Schedule 5.

 

“Credit Agreement” shall have the meaning assigned to such term in the preamble
hereto.

 

“Deposit Account”: as defined in the Uniform Commercial Code of any applicable
jurisdiction and, in any event, including, without limitation, any demand, time,
savings, passbook or like account maintained with a bank.

 

“Excluded Accounts” means (i) those Deposit Accounts that are used exclusively
for payroll, payroll taxes, workers compensation and employee benefits, or
withholding taxes, (ii) the Escrow Account under and as defined in the
Subordinated Indemnity Escrow Agreement (solely with respect to amounts that are
required to be escrowed thereby) and (iii) those Deposit Accounts, Securities
Accounts and Commodity Accounts that have an overnight balance of which in the
aggregate, together with the overnight balance of all such other Deposit
Accounts, Securities Accounts and Commodity Accounts excluded pursuant to this
clause (iii), do not exceed $1,500,000.

 

“Excluded Assets”: the collective reference to (i) all Capital Stock owned by
any Grantor in (A) Flags Beverages, Inc., Fiesta Texas Hospitality LLC, Spring
Beverage Holding Corp. and other Subsidiaries, if any, which have no material
assets other than a liquor license, (B) HWP Development Holdings LLC, HWP, HWP
Management Inc. and any other entity formed pursuant to the Great Escape
Agreements and (C) any Inactive Subsidiary, (ii) any Trademark License with
Warner Bros. or its affiliates that expressly prohibits the granting of a
security interest therein (including but not limited to (A) those licenses
contemplated by the German WB

 

2

--------------------------------------------------------------------------------

 

Acquisition, and (B) the Amended and Restated License Agreement #5854-WB/DC
dated as of April 1, 1998 with the Borrower and the License Agreement #8898-TOON
dated January 1, 1998 between the Borrower and Warner Bros. Consumer Products
Division (Cartoon Network), as any of the foregoing may be amended from time to
time), except, in each case, to the extent that such term in such license
providing for such prohibition, now or in the future, is deleted or otherwise
absent or is ineffective under applicable law (including Section 9-406, 9-407,
9-408 or 9-409 of the Uniform Commercial Code of any relevant jurisdiction),
(iii) any other Trademark License that expressly prohibits the granting of a
security interest therein, except, in each case, to the extent that such term in
such license providing for such prohibition is ineffective under applicable law
(including Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code
of any relevant jurisdiction), (iv) that portion of the Capital Stock of any
Excluded Foreign Subsidiary that is in excess of 65% of the total outstanding
Foreign Subsidiary Voting Stock of such Excluded Foreign Subsidiary, (v) any
Property (including Capital Stock) owned by any Excluded Foreign Subsidiary,
(vi) the Capital Stock of a non-Wholly Owned Subsidiary formed or acquired after
the date hereof to the extent that Section 8.6(f) of the Credit Agreement does
not require the granting of a security interest therein for so long as the
prohibition contained in the Requirement of Law or Contractual Obligation
referred to in such section continues to be in effect, (vii) any Property owned
by any Grantor to the extent that creation of a security interest therein would
be prohibited by, or result in a violation of, or constitute a default or
forfeiture under, or create a right of termination in favor of, or require the
consent of any party to, a Requirement of Law or Contractual Obligation (other
than the Partnership Parks Agreements) binding on any Grantor that is the owner
of such Property (provided that, with respect to Property acquired after the
date hereof, such Contractual Obligation existed at the time such property was
acquired and was not entered into in anticipation of such acquisition);
provided, however, that (A) such Property shall no longer constitute “Excluded
Assets” immediately at such time as such security interest ceases to be
prohibited by a binding Contractual Obligation and (B) the foregoing limitation
shall not apply to the extent that the prohibition contained in such Contractual
Obligation is ineffective under applicable law, including Section 9-406, 9-407,
9-408 or 9-409 of the Uniform Commercial Code of any relevant jurisdiction and
provided, further, in case of clauses (i) - (vi) above, in no event shall the
foregoing prohibition apply to Proceeds of the foregoing, except to the extent
such Proceeds constitute Excluded Assets, (viii) any Property of any Grantor to
the extent that the Administrative Agent shall determine in its sole discretion
in a writing to the Borrower that the costs of obtaining a security interest in
such Property is excessive in relation to the value of the security to be
afforded thereby, (ix) any United States intent-to-use Trademark application to
the extent that, and solely during the period in which, the grant of a security
interest therein would impair the validity or enforceability of such
intent-to-use trademark applications under applicable federal law, and (x) any
assets of an Unrestricted Entity and any Capital Stock in an Unrestricted Entity
for so long as such entity remains an Unrestricted Entity and its designation as
an Unrestricted Entity is not prohibited by the Credit Agreement.

 

“Grantors” shall have the meaning assigned to such term in the preamble hereto;
provided that, for the avoidance of doubt. no Excluded Foreign Subsidiary shall
be a Grantor.

 

“Guarantor Obligations”: with respect to any Guarantor, all obligations and
liabilities of such Guarantor which may arise under or in connection with this
Agreement (including, without limitation, Section 2) or any other Loan Document,
or any Specified Hedge Agreements or Specified Cash Management Agreements to
which such Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent or to any Secured Party that are required to
be paid by such Guarantor).

 

“Guarantors”: the collective reference to each Grantor other than the Borrower.

 

“Holdings” shall have the meaning assigned to such term in the preamble hereto.

 

“Infringement”: infringement, misappropriation, dilution or other impairment or
violation.

 

“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, the Copyrights, the Patents, the Trademarks, the Internet Domain
Names, and all proprietary and confidential information and data, databases and
trade secrets, whether written or unwritten, and all rights to sue at

 

3

--------------------------------------------------------------------------------

 

law or in equity for any Infringement of any of the foregoing, including the
right to receive all proceeds and damages therefrom; provided that Intellectual
Property excludes any Excluded Assets.

 

“Intellectual Property Licenses”: all Copyright Licenses, Patent Licenses, and
Trademark Licenses.

 

“Intercompany Note”: any promissory note evidencing loans made by any Grantor to
Parent or any of its Subsidiaries.

 

“Internet Domain Names”: shall mean all domain names consisting of any
combination of words and abbreviations that represents a uniquely identifiable
internet protocol address of a World Wide Web internet location and any right
related to the registration thereof.

 

“Investment Property”: the collective reference to (i) all “investment property”
as such term is defined in Section 9-102(a)(49) of the New York UCC (other than
any Capital Stock excluded from the definition of “Pledged Stock”) and
(ii) whether or not constituting “investment property” as so defined, all
Pledged Notes and all Pledged Stock; provided that Investment Property shall not
include any Excluded Assets.

 

“Issuers”: the collective reference to each issuer of any Investment Property.

 

“Lenders” shall have the meaning assigned to such term in the preamble hereto.

 

“Marketing and Sponsorship Agreements”: all agreements in which the Grantor
provides a license under Grantor’s Intellectual Property to another party in
connection with such other party’s agreement to market, promote or sponsor, or
sponsorship of or by the Grantor, entered into in the ordinary course of
business where (i) the Grantor licenses its Intellectual Property on only a
non-exclusive basis; (ii)  the agreement may be terminated by Grantor, without
cause, within a period of eighteen (18) months from the date hereof; (iii) the
grant does not permit the licensee to use the Grantor’s Intellectual property in
connection with the operation of theme parks; and (iv) the payment obligation of
either the Grantor or the other party does not exceed $50,000 for the full term
of the agreement.

 

“Material Trademarks”: all Trademarks included in the Collateral that are
material to the business of the applicable Grantor.

 

“New York UCC”: the Uniform Commercial Code as from time to time in effect in
the State of New York.

 

“Obligations”: (i) in the case of the Borrower, the Borrower Obligations, and
(ii) in the case of each Guarantor, its Guarantor Obligations.

 

“Parent” shall have the meaning assigned to such term in the preamble hereto.

 

“Patents”: (i) all letters patent of the United States, any group of countries,
other country or any political subdivision thereof, all reissues and extensions
thereof, and (ii) all applications for letters patent of the United States or
any group of countries, other country or any political subdivision thereof, and
all reissues, divisions, extensions, continuations and continuations-in-part
thereof, similar legal protections related thereto, or rights to obtain the
foregoing, including, without limitation, any of the foregoing listed in
Schedule 5.

 

“Patent License”: any written agreement providing for the grant by or to any
Grantor of any right to make, have made, manufacture, use or sell (directly or
indirectly), offer to sell, import or dispose of any invention or practice any
method covered in whole or in part by a Patent, including, without limitation,
any of the foregoing listed in Schedule 5.

 

“Pledged Notes”: all promissory notes listed on Schedule 2, all Intercompany
Notes at any time issued to any Grantor and all other promissory notes issued to
or held by any Grantor (other than promissory notes

 

4

--------------------------------------------------------------------------------

 

issued in connection with extensions of trade credit by any Grantor in the
ordinary course of business), excluding any Excluded Assets.

 

“Pledged Securities”: means any Instruments, Certificated Securities, Chattel
Paper and Investment Property.

 

“Pledged Stock”: the shares of Capital Stock listed on Schedule 2, together with
any other shares, stock certificates, options, interests or rights of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or
granted to, or held by, any Grantor while this Agreement is in effect, excluding
any Excluded Assets; provided that in no event shall more than 65% of the total
outstanding Foreign Subsidiary Voting Stock of any Excluded Foreign Subsidiary,
or any Capital Stock held by any Excluded Foreign Subsidiary, be required to be
pledged hereunder.

 

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the New York UCC and, in any event, shall include, without limitation, all
dividends or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.

 

“Receivable”: any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account).

 

“Registered Intellectual Property”: all registrations and applications for
registration of Trademarks, Patents, and Copyrights.

 

“Secured Parties”: the collective reference to the Agents, the Lenders and each
Qualified Counterparty, and shall include all former Agents, Lenders and,
subject to Section 12.16(b) of the Credit Agreement, Qualified Counterparties,
to the extent that any Obligations owing to such Persons were incurred while
such Persons were Agents, Lenders or, subject to Section 12.16(b) of the Credit
Agreement, Qualified Counterparties and such Obligations have not been paid or
satisfied in full.

 

“Securities Act”: the Securities Act of 1933, as amended.

 

“Subsidiary Guarantor”: each Grantor other than Parent, Holdings and the
Borrower.

 

“Trademarks”: (i) all trademarks, trade names, brand names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, service marks, logos and other source or business identifiers, and all
goodwill associated therewith or symbolized thereby, now existing or hereafter
adopted or acquired, all registrations thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or
any group of countries, other country or any political subdivision thereof, and
all common-law rights related thereto, including, without limitation, any of the
foregoing listed in Schedule 5, and (ii) the right to obtain all renewals
thereof.

 

“Trademark License”: any written agreement providing for the grant by or to any
Grantor of any right to use any Trademark, including, without limitation, any of
the foregoing listed in Schedule 5, but excluding the Excluded Assets.

 

“Vehicles”: all cars, trucks, trailers, construction and earth moving equipment
and other vehicles covered by a certificate of title law of any state and all
tires and other appurtenances to any of the foregoing.

 

1.2           Other Definitional Provisions.  (a) The words “hereof,” “herein”,
“hereto” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole as amended from time to time and not to
any particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.

 

5

--------------------------------------------------------------------------------

 

(b)           The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

 

(c)           Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor’s Collateral or the relevant part thereof.

 

Section 2.             GUARANTEE

 

2.1           Guarantee.             (a) Each of the Guarantors hereby, jointly
and severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Secured Parties, and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower and the other Loan Parties when due (whether at
the stated maturity, by acceleration or otherwise) of the Obligations.

 

(b)           Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Security Documents and the maximum amount which may be secured by the
Liens granted with respect to the Collateral hereunder and the Collateral under
the other Security Documents, in each case, shall in no event exceed the amount
which can be guaranteed by such Guarantor, or secured by assets of such
Guarantor, under applicable federal and state laws relating to the insolvency of
debtors (after giving effect to the right of contribution established in
Section 2.2).

 

(c)           Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any Secured
Party hereunder.

 

(d)           The guarantee contained in this Section 2 shall remain in full
force and effect until all of the Borrower Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time the
Borrower may be free from any Obligations.

 

(e)           No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Secured Party from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full, no Letter of Credit shall be outstanding and the Commitments are
terminated.

 

2.2           Right of Contribution.  Each Subsidiary Guarantor hereby agrees
that to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment.  Each Subsidiary Guarantor’s right of contribution shall be
subject to the terms and conditions of Section 2.3.  The provisions of this
Section 2.2 shall in no respect limit the obligations and liabilities of any
Subsidiary Guarantor to the Administrative Agent and the Secured Parties, and
each Subsidiary Guarantor shall remain liable to the Administrative Agent and
the Secured Parties for the full amount guaranteed by such Subsidiary Guarantor
hereunder.

 

2.3           No Subrogation.  Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any Secured Party, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Secured Party
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Secured
Party for the payment of the Borrower Obligations, nor shall any Guarantor seek
or be entitled

 

6

--------------------------------------------------------------------------------

 

to seek any contribution or reimbursement from the Borrower or any other
Guarantor in respect of payments made by such Guarantor hereunder, until all
amounts owing to the Administrative Agent and the Secured Parties by the
Borrower on account of the Borrower Obligations are paid in full, no Letter of
Credit shall be outstanding and the Commitments are terminated.  If any amount
shall be paid to any Guarantor on account of such subrogation rights at any time
when all of the Borrower Obligations shall not have been paid in full, such
amount shall be held by such Guarantor in trust for the Administrative Agent and
the Secured Parties, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Administrative
Agent in the exact form received by such Guarantor (duly indorsed by such
Guarantor to the Administrative Agent, if required), to be applied against the
Borrower Obligations, whether matured or unmatured, in such order as the
Administrative Agent may determine.

 

2.4           Amendments, etc. with respect to the Borrower Obligations.  Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Secured Party may be
rescinded by the Administrative Agent or such Secured Party and any of the
Borrower Obligations continued, and the Borrower Obligations, or the liability
of any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Secured Party, and the Credit Agreement and the other Loan Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, restated, amended and restated, supplemented or terminated, in whole
or in part, as the Administrative Agent (or the Required Lenders, certain
Lenders or all Lenders, as the case may be, in each case pursuant to the terms
of the Credit Agreement) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Secured Party for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released.  Neither
the Administrative Agent nor any Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Borrower Obligations or for the guarantee contained in this Section 2 or
any property subject thereto.

 

2.5           Guarantee Absolute and Unconditional.  Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Administrative
Agent or any Secured Party upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Section 2; and all dealings between the
Borrower and any of the Guarantors, on the one hand, and the Administrative
Agent and the Secured Parties, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Section 2.  Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or any of the Guarantors with respect to the Borrower Obligations to
the extent permitted by law.  Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
Specified Hedge Agreement or Specified Cash Management Agreement, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Secured Party, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or such
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for the Borrower Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in bankruptcy or in
any other instance.  When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Administrative Agent or
any Secured Party may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
the Borrower, any Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Secured
Party to make any such demand, to pursue such other rights or remedies or to
collect any payments from the Borrower, any Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any

 

7

--------------------------------------------------------------------------------

 

release of the Borrower, any Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Secured Party against any
Guarantor.  For the purposes hereof “demand” shall include the commencement and
continuance of any legal proceedings.

 

2.6           Reinstatement.  The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.

 

2.7           Payments.  Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim, in immediately available funds in the currency in which the
relevant Obligation is denominated, at the applicable Payment Office.

 

Section 3.             GRANT OF SECURITY INTEREST

 

Each Grantor hereby grants to the Administrative Agent, for the ratable benefit
of the Secured Parties, a security interest in all of the following property now
owned or at any time hereafter acquired by such Grantor or in which such Grantor
now has or at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor’s Obligations and, for the avoidance
of doubt, the Borrower’s Obligations:

 

(a)           all Accounts;

 

(b)           all Chattel Paper;

 

(c)           all Deposit Accounts;

 

(d)           all Documents;

 

(e)           all General Intangibles;

 

(f)            all Goods (including, without limitation, Equipment, Fixtures and
Inventory);

 

(g)           all Instruments;

 

(h)           all Intellectual Property and Intellectual Property Licenses;

 

(i)            all Investment Property (including, without limitation, Commodity
Accounts and Securities Accounts);

 

(j)            all Letter-of-Credit Rights;

 

(k)           all Commercial Tort Claims, including those set forth on Schedule
7;

 

(l)            all other personal property not otherwise described above;

 

(m)          all books and records pertaining to the Collateral; and

 

8

--------------------------------------------------------------------------------

 

(n)           to the extent not otherwise included, all Proceeds, Supporting
Obligations and products of any and all of the foregoing and all collateral
security and guarantees given by any Person with respect to any of the
foregoing.

 

Notwithstanding the foregoing, (i) the Collateral shall not include any Excluded
Asset and (ii) the Partnership Parks Entities and their Property subject to the
Partnership Parks Agreements, and the Capital Stock of GP Holdings, Inc. owned
by Parent, shall be expressly excluded from, and shall not be subject to, any
provisions of this Agreement so long as the creation of a security interest
under, or the execution of, this Agreement is prohibited by a Contractual
Obligation binding on the Partnership Parks Entities as in effect on the Closing
Date (subject to the proviso at the end of this clause (ii)) or, with respect to
the Capital Stock of GP Holdings, Inc. owned by Parent, is prohibited by the
Partnership Parks Agreements as in effect on the Closing Date (subject to the
proviso at the end of this clause (ii)); provided that Parent and its
Subsidiaries may, subject to Section 9.14(b) of the Credit Agreement, enter into
amendments, restatements, supplements or other modifications to the Partnership
Parks Agreements and replacement agreements having a substantially similar
purpose to the Partnership Parks Agreements so long as, in each case, there is
no adverse effect on the Lien purported to be created by the Security Documents
in the assets of (x) Parent (other than with respect to the Capital Stock of GP
Holdings, Inc.) and (y) Holdings, Borrower or any of their Subsidiaries

 

Section 4.             REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, and to induce the Qualified Counterparties to
enter into the Specified Cash Management Agreements and Specified Hedge
Agreements, as applicable, each Grantor hereby represents and warrants to the
Administrative Agent and each Secured Party that:

 

4.1           Investment Property.  (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.

 

(b)           All the shares of the Pledged Stock issued by each Issuer (other
than any Issuer that is a Foreign Subsidiary to the extent such concept is not
applicable in the jurisdiction of organization of such Issuer) have been duly
and validly issued and (other than in respect of partnerships and limited
liability company interests) are fully paid and nonassessable.

 

(c)           Each of the Pledged Notes, to the knowledge of the Grantors,
constitutes the legal, valid and binding obligation of the obligor with respect
thereto, enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.

 

(d)           Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or options in favor of, or claims of, any other Person,
except the security interest created by this Agreement and other Liens not
prohibited by the Loan Documents.

 

4.2           Intellectual Property.  (a)  Schedule 5 lists all (i) Registered
Intellectual Property and all material Internet Domain Names owned by such
Grantor on the date hereof and (ii) all material Registered Intellectual
Property exclusively licensed by such Grantor as of the date hereof, noting in
each case the relevant registration, application or serial number, the
jurisdiction of registration or application, and, in the case of (ii), the title
of the license, the counterparty to such license and the date of such license,
provided that with respect to the foregoing clause (ii), the applicable
Registered Intellectual Property is identified in the applicable license.

 

9

--------------------------------------------------------------------------------

 

(b)           Except as set forth in Schedule 5 and except for Marketing and
Sponsorship Agreements, on the date hereof, none of the Intellectual Property
included in the Collateral is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.

 

(c)           Such Grantor owns (and has the right to use), or is licensed to
use, all Intellectual Property material to the conduct of its business as
currently conducted, free and clear of all Liens other than Permitted Liens.
Such Grantor has taken all reasonable actions to protect, preserve and maintain
such Intellectual Property except where failure to take such actions would
otherwise be permitted by Sections 9.5(c)(i) and (c)(xvi) of the Credit
Agreement.  Except as could not reasonably be expected to have a Material
Adverse Effect, (i) all such Intellectual Property is valid and enforceable and
(ii) all Registered Intellectual Property has not expired or been abandoned
except as would otherwise be permitted by Sections 9.5(c)(i) and (c)(xvi) of the
Credit Agreement.  No claim, action or proceeding is pending by any Person or,
to the knowledge of such Grantor, threatened, or imminent, on the date hereof,
and no holding, decision or judgment has been rendered by any Governmental
Authority or arbitrator, which may limit, cancel or challenge the validity,
enforceability, ownership or use of, any Intellectual Property included in the
Collateral, except for claims, actions, proceedings, holdings, decisions or
judgments which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.  To the knowledge of such Grantor,
(i) the operation of the business of such Grantor does not Infringe the
Intellectual Property rights of any Person, and, (ii) no Person is Infringing
any Intellectual Property owned by such Grantor to an extent which could
reasonably be expected to have a Material Adverse Effect.

 

(d)           Except as could not reasonably be expected to have a Material
Adverse Effect, (i) such Grantor is not in breach of any Intellectual Property
Licenses to which it is a party, and (ii) no Person is in breach of such
Intellectual Property Licenses.

 

4.3           Deposit Accounts and Securities Accounts.  Schedule 6 correctly
sets forth, on the date hereof, each Deposit Account, Securities Account and
Commodity Account held or maintained by such Grantor on the date hereof, and
indicates the bank or intermediary at which the account is held and the account
number and whether such account is an Excluded Account.

 

4.4           Commercial Tort Claims and Letter-of-Credit Rights.  On the date
hereof, no Grantor has rights in any Commercial Tort Claim with potential value
in excess of $2,500,000 (or in excess of $5,000,000 for all Commercial Tort
Claims), or any Letter-of-Credit Right with a value in excess of $2,500,000 (or
in excess of $5,000,000 for all Letter-of-Credit Rights), other than in each
case as set forth on Schedule 7.

 

4.5           Additional Representations and Warranties.

 

(a)           On the date of this Agreement, such Grantor’s full legal name,
type of organization, jurisdiction of organization, identification number from
the jurisdiction of organization (if any) and the location of such Grantor’s
chief executive office or sole place of business or principal residence, as the
case may be, are specified on Schedule 4.  Such Grantor has furnished to the
Administrative Agent a certified charter, certificate of incorporation or other
organization document and good standing certificate from its jurisdiction of
organization as of a date which is recent to the date hereof.

 

(b)           Each Grantor has good and valid rights in and title to the
Collateral with respect to which it has purported to grant a security interest
hereunder and has full corporate, limited liability company or partnership power
(as applicable) and authority to grant to the Administrative Agent a security
interest in such Collateral pursuant hereto and to execute, deliver and perform
its obligations in accordance with the terms of this Agreement, without the
consent or approval of any other Person other than (i) any consent or approval
that has been obtained and is in full force and effect or (ii) those consents or
approvals, the failure of which to obtain could not reasonably be expected to
have a Material Adverse Effect.

 

(c)           The UCC financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations for filing
in each governmental, municipal or other office specified in Schedule 3 hereto,
and with respect to Collateral consisting of registered and applied for United
States Patents, Trademarks, or Copyrights, to the extent required by applicable
Federal law, filings made at the United States Patent and Trademark Office and
the United States Copyright Office, as applicable, are all the filings,
recordings and

 

10

--------------------------------------------------------------------------------

 

registrations that are necessary to establish a legal, valid and perfected
security interest in favor of the Administrative Agent (for the benefit of the
Secured Parties) in respect of all Collateral in which a security interest may
be perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements. 
Notwithstanding anything to the contrary herein, nothing in this Agreement or
any other Loan Document shall require any Grantor to make any filings or take
any actions (or imply that it is required to make or has made any such filings
or taken any such actions) to record or perfect the Administrative Agent’s Lien
on and security interest in any Intellectual Property Collateral outside the
United States or in any non-United States Intellectual Property Collateral,

 

(d)                                 The security interest granted to the
Administrative Agent constitutes (i) a legal and valid security interest in all
the Collateral securing the payment and performance of the Obligations and
(ii) subject to the filings described in Section 4.5(c), a perfected security
interest in all Collateral in which a security interest may be perfected by
filing, recording or registering a financing statement or analogous document in
the United States (or any political subdivision thereof) and its territories and
possessions pursuant to the Uniform Commercial Code in the relevant
jurisdiction. The security interest granted to the Administrative Agent is and
shall be prior to any other Lien on any of the Collateral, other than Liens
expressly permitted under the Credit Agreement.

 

(e)                                  The Collateral is owned by the Grantors
free and clear of any Lien, except for Permitted Liens under the Credit
Agreement.  None of the Grantors has filed or consented to the filing of (i) any
financing statement or analogous document under the Uniform Commercial Code of
any jurisdiction or any other applicable laws covering any Collateral or
(ii) any assignment in which any Grantor assigns any Collateral or any security
agreement or similar instrument covering any Collateral with any foreign
governmental, municipal or other office, which financing statement or analogous
document, assignment, security agreement or similar instrument is still in
effect, except, in each case, for Liens expressly permitted under the Credit
Agreement, or those which are for notice purposes only.

 

(f)                                   Subject to Section 8.10 of the Credit
Agreement, each Grantor has taken all actions necessary or desirable, including
without limitation those specified in Section 5.1 to establish the
Administrative Agent’s “control” (within the meanings of Sections 8-106 and
9-106 of the Uniform Commercial Code of the applicable jurisdiction) over any
portion of the Investment Property constituting Certificated Securities,
Uncertificated Securities, Securities Accounts, Securities Entitlements or
Commodity Accounts and establish the Administrative Agent’s “control” (within
the meaning of Section 9-104 of the Uniform Commercial Code of the applicable
jurisdiction) over all Deposit Accounts (other than Excluded Accounts).

 

Section 5.                                           COVENANTS

 

Each Grantor covenants and agrees with the Administrative Agent and the Secured
Parties that, from and after the date of this Agreement until the Obligations
shall have been paid in full (except as otherwise set forth in Section 12.16 of
the Credit Agreement), no Letter of Credit shall be outstanding and the
Commitments shall have terminated:

 

5.1                               Pledged Securities.

 

(a)                                 Each Grantor agrees promptly to deliver or
cause to be delivered to the Administrative Agent, for the benefit of the
Secured Parties, any and all Pledged Securities (other than any uncertificated
Capital Stock, but only for so long as such Capital Stock remains
uncertificated) to the extent such Pledged Securities, in the case of promissory
notes or other instruments evidencing Indebtedness, are required to be delivered
pursuant to paragraph (b) of this Section 5.1.

 

(b)                                 Each Grantor will cause any Indebtedness for
borrowed money (other than intercompany loans among Loan Parties, which shall be
governed by Section 6.6 of this Agreement) having an aggregate principal amount
in excess of $2,500,000 (or in excess of $5,000,000 for all amounts owed to the
Grantors as Indebtedness for borrowed money) owed to such Grantor by any Person
to be evidenced by a duly executed promissory note that is

 

11

--------------------------------------------------------------------------------

 

pledged and delivered to the Administrative Agent, for the benefit of the
Secured Parties, pursuant to the terms hereof.

 

(c)                                  Upon delivery to the Administrative Agent,
(i) any Pledged Securities shall be accompanied by stock powers duly executed in
blank or other instruments of transfer reasonably satisfactory to the
Administrative Agent and by such other instruments and documents as the
Administrative Agent may reasonably request and (ii) all other property
comprising part of the Pledged Securities shall be accompanied by proper
instruments of assignment duly executed by the applicable Grantor and such other
instruments or documents as the Administrative Agent may reasonably request. 
Each delivery of Pledged Securities shall be accompanied by a schedule
describing such Pledged Securities, which schedule shall be attached hereto as
Schedule 2 and made a part hereof; provided that failure to attach any such
schedule hereto shall not affect the validity of such pledge of such Pledged
Securities.  Each schedule so delivered shall supplement any prior schedules so
delivered.

 

(d)                                 At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole expense of such
Grantor, such Grantor will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, and without limiting any other
provisions in this Agreement, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts (other than Excluded
Accounts), Letter-of-Credit Rights and any other relevant Collateral, executing
Control Agreements and taking any other actions necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.

 

(e)                                  No Grantor shall vote to enable or take any
another action to cause any issuer of any Pledged Securities which are not
securities (for purposes of the applicable Uniform Commercial Code) on the date
hereof to elect or otherwise take any action to cause such Pledged Securities to
be treated as securities for purposes of the applicable Uniform Commercial Code
without notifying the Administrative Agent in advance in writing of any such
election or action and, in such event, shall take all steps necessary or
advisable to establish the Administrative Agent’s “control” (within the meaning
of the applicable Uniform Commercial Code) thereof.

 

(f)                                   In the case of each Grantor which is an
Issuer, such Issuer agrees that (i) it will be bound by the terms of this
Agreement relating to the Investment Property issued by it and will comply with
such terms insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the events
described in Section 5.1(e) or 5.4(b) with respect to the Investment Property
issued by it and (iii) the terms of Sections 6.2(d) and 6.7 shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.2(d) or 6.7 with respect to the Investment Property issued
by it.

 

5.2                               Intellectual Property.  (a) Except as
permitted by Sections 9.5(c)(i) and (c)(xvi) of the Credit Agreement, such
Grantor (either itself or through licensees) will (i) continue to use each
Material Trademark in order to maintain such Material Trademark in full force
free from any claim of abandonment for non-use, (ii) maintain in all material
respects as in the past the quality of all products and services offered under
any Material Trademark, (iii) use each Material Trademark with all appropriate
notices of registration and all other notices and legends required by applicable
Requirements of Law, (iv) not adopt or use any new mark, or any mark which is
confusingly similar or a colorable imitation of a Trademark included in the
Collateral unless the Administrative Agent, for the ratable benefit of the
Secured Parties, shall obtain a perfected security interest in such mark
pursuant to this Agreement, and (v) not (and will use commercially reasonable
efforts to prohibit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby a Material Trademark could reasonably be
expected to become invalidated or diluted in any way, except, in each case, as
could not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Except as permitted by Sections
9.5(c)(i) and (c)(xvi) of the Credit Agreement, such Grantor will not do any
act, or omit to do any act (and will use commercially reasonable efforts to
ensure that any licensee or sublicensee does not do any act or omit to do any
act) whereby any material Patent included in the Collateral is abandoned or
dedicated to the public, or allowed to prematurely lapse.

 

12

--------------------------------------------------------------------------------

 

(c)                                  Such Grantor will not do any act or
knowingly omit to do any act (and will use commercially reasonable efforts to
ensure that any licensee or sublicensee does not do any act or omit to do any
act) whereby any material portion of the Copyrights included in the Collateral
could reasonably be expected to become invalidated or otherwise materially
impaired.  Such Grantor will not do any act (and will use commercially
reasonable efforts to ensure that any licensee or sublicensee does not do any
act) whereby a material portion of any Copyright included in the Collateral
falls into the public domain.

 

(d)                                 Such Grantor will not (and will use
commercially reasonable efforts to ensure that any licensee or sublicense does
not) knowingly Infringe in any material respect upon the Intellectual Property
rights of any other Person.

 

(e)                                  Such Grantor will notify the Administrative
Agent in the next Compliance Certificate required to be delivered by it pursuant
to Section 8.1(f) of the Credit Agreement if it knows, or has reason to know,
that any Registered Intellectual Property listed or required to be listed in
Schedule 5 may become forfeited, abandoned or dedicated to the public, or of any
adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency, or any court or tribunal in any country)
regarding such Grantor’s rights in, or the validity, enforceability, ownership
or use of, any Intellectual Property listed in Schedule 5 or otherwise material
to such Grantor’s business, including, without limitation, such Grantor’s right
to register or maintain same.

 

(f)                                   Whenever such Grantor, either by itself or
through any agent, employee, licensee or designee, shall acquire, become the
exclusive licensee of, or file an application for the registration of, any
Registered Intellectual Property with the United States Copyright Office or the
United States Patent and Trademark Office, or any similar office or agency in
any group of countries, other country or any political subdivision thereof, such
Grantor shall report such acquisition, licensing or filing to the Administrative
Agent on the first Compliance Certificate delivered pursuant to
Section 8.1(f) of the Credit Agreement after such acquisition, licensing, or
filing.  Upon request of the Administrative Agent, such Grantor shall execute
and deliver, and have recorded, any and all agreements, instruments, documents,
and papers as the Administrative Agent may reasonably request to evidence the
Administrative Agent’s and the Secured Parties security interest in any
Registered Intellectual Property which is not an Excluded Asset.

 

(g)                                  Except as permitted by Sections
9.5(c)(i) or (c)(xvi) of the Credit Agreement, such Grantor will take all
reasonably necessary actions to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration of all
Registered Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.

 

(h)                                 In the event that any material Intellectual
Property included in the Collateral is Infringed by a third party, such Grantor
shall (i) take such actions as such Grantor shall reasonably deem appropriate
under the circumstances to protect such Intellectual Property and (ii) if the
failure to successfully enforce such Intellectual Property would have a Material
Adverse Effect, promptly notify the Administrative Agent after it learns thereof
and, after taking reasonable and customary measures to stop such Infringement
and where appropriate in such Grantor’s reasonable business judgment, sue for
Infringement, seek injunctive relief and to recover any and all damages for such
Infringement.

 

13

--------------------------------------------------------------------------------

 

5.3                               Additional Covenants.

 

(a)                                 The Borrower agrees, on its own behalf and
on behalf of each Grantor, to notify the Administrative Agent in writing of any
change (i) in legal name of any Grantor, (ii) in the identity or type of
organization or corporate structure of any Grantor, (iii) in the jurisdiction of
organization of any Grantor, or (iv) in the chief executive office of any
Grantor, within 15 days of any such change.  Such Grantor shall take all actions
necessary to maintain the continuous validity, perfection and the same priority
of the Administrative Agent’s security interest in the Collateral granted or
intended to be granted under the Loan Agreements.

 

(b)                                 Each Grantor shall, at its own expense, take
any and all commercially reasonable actions necessary to defend title to the
Collateral against all Persons and to defend the security interest of the
Administrative Agent in the Collateral and the priority thereof against any Lien
not expressly permitted by the Credit Agreement.

 

(c)                                  The Borrower agrees, on its own behalf and
on behalf of each other Grantor, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Administrative Agent may from time to time
reasonably request to better assure, preserve, protect and perfect its security
interest and the rights and remedies created hereby (subject to the limitations
herein), including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting to the Administrative
Agent of a security interest and the filing of any financing statements
(including fixture filings) or other documents in connection herewith or
therewith.  If any amount payable under or in connection with any of the
Collateral that is in excess of $2,500,000 (or in excess of $5,000,000 for all
amounts) shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be promptly pledged and delivered to
the Administrative Agent, for the benefit of the Secured Parties, duly endorsed
in a manner reasonably satisfactory to the Administrative Agent.

 

(d)                                 After an Event of Default has occurred or is
continuing, at its option, the Administrative Agent may discharge past due
taxes, assessments, charges, fees, Liens, security interests or other
encumbrances at any time levied or placed on the Collateral, and may pay for the
maintenance and preservation of the Collateral to the extent any Grantor fails
to do so as required by the Credit Agreement or this Agreement and within a
reasonable period of time after the Administrative Agent has requested that it
do so, and each Grantor jointly and severally agrees to reimburse the
Administrative Agent within 10 days after demand for any payment made or any
reasonable expense incurred by the Administrative Agent pursuant to the
foregoing authorization.  Nothing in this paragraph shall be interpreted as
excusing any Grantor from the performance of, or imposing any obligation on the
Administrative Agent or any Secured Party to cure or perform, any covenants or
other promises of any Grantor with respect to taxes, assessments, charges, fees,
Liens, security interests or other encumbrances and maintenance as set forth
herein, in the other Loan Documents.

 

(e)                                  If at any time any Grantor shall take a
security interest in any property of any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account (an
“Account Debtor”), or any other Person, the value of which is in excess of
$2,500,000 (or in excess of $5,000,000 in the aggregate for all property in
which Grantors take a security interest in the manner contemplated by this
clause (e)), to secure payment and performance of an Account, such Grantor shall
promptly assign such security interest to the Administrative Agent for the
benefit of the Secured Parties.  Such assignment need not be filed of public
record unless necessary to continue the perfected status of the security
interest against creditors of and transferees from the Account Debtor or other
Person granting the security interest.

 

(f)                                   Each Grantor (rather than the
Administrative Agent or any Secured Party) shall remain liable (as between
itself and any relevant counterparty) to observe and perform all the material
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Collateral, all in accordance
with the terms and conditions thereof, and each Grantor jointly and severally
agrees to indemnify and hold harmless the Administrative Agent and the Secured
Parties from and against any and all liability for such performance; provided,
that no Grantor shall have any obligation hereunder to the Administrative Agent
or such Secured Party with respect to any such liabilities to the extent such
liabilities are found by a final and non-appealable decision of a court of
competent jurisdiction to have resulted from the gross negligence, bad faith or
willful misconduct of the Administrative Agent or such Secured Party or of any
director, officer, or employee of the Administrative Agent or such Secured
Party.

 

14

--------------------------------------------------------------------------------

 

(g)                                  If any Grantor shall at any time hold or
acquire a Commercial Tort Claim with a value in excess of $2,500,000 (or the
Grantors collectively hold or acquire Commercial Tort Claims in the aggregate
exceeding $5,000,000 at any time), such Grantor shall promptly notify the
Administrative Agent in writing signed by such Grantor of the brief details
thereof and grant to the Administrative Agent a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement pursuant to a
document in form and substance reasonably satisfactory to the Administrative
Agent.

 

(h)                                 If the aggregate amount of all
Letter-of-Credit Rights held by all Grantors exceeds $10,000,000, the Borrower
shall promptly notify the Administrative Agent in writing and the Grantors shall
take such actions to establish the Administrative Agent’s “control” (within the
meaning of Section 9-107 of the Uniform Commercial Code of the relevant
jurisdiction) over such Letter-of Credit Rights, pursuant to a document in form
and substance reasonably satisfactory to the Administrative Agent, as may be
reasonably requested by the Administrative Agent at its option.

 

(i)                                     If the aggregate book value of all
Vehicles owned by all such Grantors exceeds $10,000,000, the Borrower shall
promptly notify the Administrative Agent in writing and the Grantors shall take
such actions in respect of the perfection of the Administrative Agent’s security
interest in such Vehicles as may be reasonably requested by the Administrative
Agent (it being understood that having the Administrative Agent’s name added to
the title of such vehicles in the relevant jurisdictions shall be deemed to be
reasonable).

 

5.4                               Other Actions.  In order to further ensure the
attachment, perfection and priority of, and the ability of the Administrative
Agent to enforce its security interest, each Grantor agrees, in each case at
such Grantor’s own expense, to take the following actions with respect to the
following Collateral:

 

(a)                                 Instruments.  If any Grantor shall at any
time hold or acquire any Instruments (other than in respect of intercompany
loans among Loan Parties, which shall be governed by Section 6.6 of this
Agreement) constituting Collateral and evidencing an amount in excess of
$2,500,000 (or in excess of $5,000,000 for all Instruments held or acquired by
the Grantors), such Grantor shall forthwith endorse, assign and deliver the same
to the Administrative Agent for the benefit of the Secured Parties, accompanied
by such instruments of transfer or assignment duly executed in blank as the
Administrative Agent may from time to time reasonably request.

 

(b)                                 Investment Property.  If any Grantor shall
at any time hold or acquire any certificated Capital Stock, such Grantor shall,
to the extent such Capital Stock is not an Excluded Asset, forthwith endorse,
assign and deliver the same to the Administrative Agent for the benefit of the
Secured Parties, accompanied by such instruments of transfer or assignment duly
executed in blank as the Administrative Agent may from time to time reasonably
request.  If any Capital Stock, to the extent such Capital Stock is not an
Excluded Asset, now or hereafter acquired by any Grantor are uncertificated and
are issued to such Grantor or its nominee directly by the issuer thereof, such
Grantor shall promptly notify the Administrative Agent thereof and, unless the
Administrative Agent in its sole discretion in writing advises such Grantor that
such Grantor does not need to take the following actions, then pursuant to an
agreement in form and substance reasonably satisfactory to the Administrative
Agent, either (i) cause the Issuer to agree to comply with instructions from the
Administrative Agent as to such securities, without further consent of any
Grantor or such nominee, or (ii) arrange for the Administrative Agent to become
the registered owner of the securities.  The Administrative Agent agrees with
each of the Grantors that the Administrative Agent shall not give any such
instructions or directions to any such Issuer, and shall not withhold its
consent to the exercise of any withdrawal or dealing rights by any Grantor,
unless an Event of Default has occurred and is continuing.

 

(c)                                  Deposit Accounts, Securities Accounts and
Commodity Accounts.  Subject to Section 8.10 of the Credit Agreement and the
final sentence of this clause (c), no Grantor shall maintain any Deposit
Account, Securities Account or Commodity Account (other than, in each case,
Excluded Accounts) unless such Deposit Account, Securities Account or Commodity
Account is subject to a Control Agreement or is otherwise subject to the
“control” of the Administrative Agent (as defined in Section 9-104, 8-106 and
9-106 of the UCC) in favor of the Administrative Agent for the benefit of the
Secured Parties.  The Administrative Agent agrees with each of the Grantors that
the Administrative Agent shall not give any entitlement orders or instructions
or directions to any bank, securities intermediary or commodity intermediary,
and shall not withhold its consent to the exercise of any withdrawal or dealing
rights by any Grantor, unless an Event of Default has occurred and is
continuing.

 

15

--------------------------------------------------------------------------------

 

Section 6.                                           REMEDIAL PROVISIONS

 

6.1                               Registration in Nominee Name; Denominations. 
If an Event of Default shall occur and be continuing, (a) the Administrative
Agent, on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Securities in its own name as pledgee,
the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the
Administrative Agent, and each Grantor will promptly give to the Administrative
Agent copies of any notices or other communications received by it with respect
to Pledged Securities registered in the name of such Grantor (provided that the
Administrative Agent shall not exercise the foregoing right with respect to an
Event of Default unless it has given the Borrower two Business Days’ prior
written notice (other than with respect to Events of Default under
Section 10(a), Section 10(g), Section 10(h) or Section 10(i) of the Credit
Agreement, with respect to which no such notice shall be required)) and (b) the
Administrative Agent shall have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.

 

6.2                               Voting Rights; Dividends and Interest.

 

(a)                                 Unless and until an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
the Borrower five (5) Business Days’ prior written notice that the rights of the
Grantors under this Section 6.2 are being suspended:

 

(i)                                     Each Grantor shall be entitled to
exercise any and all voting and/or other consensual rights and powers inuring to
an owner of Pledged Securities or any part thereof for any purpose not in
violation of the terms of this Agreement, the Credit Agreement and the other
Loan Documents.

 

(ii)                                  Each Grantor shall be entitled to receive
and retain any and all dividends, interest, principal and other distributions
paid on or distributed in respect of the Pledged Securities to the extent and
only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in accordance
with, the terms and conditions of the Credit Agreement, the other Loan Documents
and applicable Laws; provided that any noncash dividends, interest, principal or
other distributions, whether resulting from a subdivision, combination or
reclassification of the outstanding equity interests of the issuer of any
Pledged Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Collateral (subject to the
limitations in the definition thereof), and, if received by any Grantor, shall
not be commingled by such Grantor with any of its other funds or property but
shall be held separate and apart therefrom, shall be held in trust for the
benefit of the Administrative Agent and the Secured Parties and shall be
forthwith delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement reasonably requested by the Administrative
Agent).

 

(b)                                 Upon the occurrence and during the
continuance of an Event of Default, after the Administrative Agent shall have
notified the Borrower of the suspension of the rights of the Grantors under
paragraph (a)(ii) of this Section 6.2, then all rights of any Grantor to
dividends, interest, principal or other distributions that such Grantor is
authorized to receive pursuant to paragraph (a)(ii) of this Section 6.2 shall
cease, and all such rights shall thereupon become vested in the Administrative
Agent, which shall have the sole and exclusive right and authority to receive
and retain such dividends, interest, principal or other distributions.  All
dividends, interest, principal or other distributions received by any Grantor
contrary to the provisions of this Section 6.2 shall be (i) held in trust for
the benefit of the Administrative Agent, (ii) segregated from other property or
funds of such Grantor and (iii) forthwith delivered to the Administrative Agent
in the same form as so received (with any necessary endorsement reasonably
requested by the Administrative Agent).  Any and all money and other property
paid over to or received by the Administrative Agent pursuant to the provisions
of this paragraph (b) shall be retained by the Administrative Agent in an
account to be established by the Administrative Agent upon receipt of such money
or other property and shall be applied in accordance with the provisions of
Section 6.4.  After all Events of Default have been cured or waived, the
Administrative Agent shall promptly repay to each Grantor (without interest) all
dividends, interest, principal or other distributions that such Grantor would
otherwise be permitted to retain pursuant to the terms of paragraph (a)(ii) of
this Section 6.2 and that remain in such account.

 

16

--------------------------------------------------------------------------------

 

(c)                                  Upon the occurrence and during the
continuance of an Event of Default, after the Administrative Agent shall have
notified the Borrower of the suspension of the rights of the Grantors under
paragraph (a)(i) of this Section 6.2, then all rights of any Grantor to exercise
the voting and consensual rights and powers it is entitled to exercise pursuant
to paragraph (a)(i) of this Section 6.2 shall cease, and all such rights shall
thereupon become vested in the Administrative Agent, which shall have the sole
and exclusive right and authority to exercise such voting and consensual rights
and powers; provided that, unless otherwise directed by the Required Lenders,
the Administrative Agent shall have the right from time to time following and
during the continuance of an Event of Default to permit the Grantors to exercise
such rights.  After all Events of Default have been cured or waived, each
Grantor shall have the exclusive right to exercise the voting and/or consensual
rights and powers that such Grantor would otherwise be entitled to exercise
pursuant to the terms of paragraph (a)(i) of this Section 6.2.

 

(d)                                 Each Grantor hereby authorizes and instructs
each Issuer of any Investment Property pledged by such Grantor hereunder to
(i) comply with any instruction received by it from the Administrative Agent in
writing that (x) states that an Event of Default has occurred and is continuing
and (y) is otherwise in accordance with the terms of this Agreement, without any
other or further instructions from such Grantor, and each Grantor agrees that
each Issuer shall be fully protected in so complying, and (ii) pay any non-cash
dividends or other non-cash payments with respect to the Investment Property
directly to the Administrative Agent and, after such Issuer receives notice from
the Administrative Agent that an Event of Default has occurred, pay any cash
dividends or other payments with respect to the Investment Property directly to
the Administrative Agent.

 

(e)                                  In order to permit the Administrative Agent
to exercise the voting and other consensual rights which it may be entitled to
exercise pursuant hereto and to receive all dividends and other distributions
which it may be entitled to receive hereunder, each Grantor (i) shall promptly
execute and deliver (or cause to be executed and delivered) to the
Administrative Agent all proxies, dividend payment orders and other instruments
as the Administrative Agent may from time to time reasonably request and (ii)
acknowledges that the Administrative Agent may utilize the power of attorney set
forth herein.

 

6.3                               Additional Remedies upon Default.

 

(a)                                 Upon the occurrence and during the
continuance of an Event of Default, it is agreed that the Administrative Agent
shall have the right to exercise any and all rights afforded to a Secured Party
with respect to the Obligations under the Uniform Commercial Code or other
applicable law and also may (i) require each Grantor to, and each Grantor agrees
that it will at its expense and upon request of the Administrative Agent
forthwith, assemble all or part of the Collateral as directed by the
Administrative Agent and make it available to the Administrative Agent at a
place and time to be designated by the Administrative Agent; (ii) occupy any
premises owned or, to the extent lawful and permitted, leased by any of the
Grantors where the Collateral or any part thereof is assembled or located for a
reasonable period in order to effectuate its rights and remedies hereunder or
under law, without obligation to such Grantor in respect of such occupation;
(iii) prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent the Administrative Agent deems appropriate (iv)
exercise any and all rights and remedies of any of the Grantors under or in
connection with the Collateral, or otherwise in respect of the Collateral,
provided that, with respect to any Collateral consisting of Pledged Stock of any
Issuer that is not a Wholly Owned Subsidiary, such exercise shall be subject to
any limitations or prohibitions of any Contractual Obligations among the holders
of such Issuer’s Capital Stock; and (v) subject to the mandatory requirements of
applicable law, consent to the use by any Grantor of any cash collateral arising
in respect of the Collateral on such terms as the Administrative Agent deems
reasonable and/or may sell, assign, lease, license or otherwise dispose of, or
acquire by credit bid on behalf of the Secured Parties, all or any part of the
Collateral securing the Obligations at a public or private sale or at any
broker’s board or on any securities exchange, for cash, upon credit or for
future delivery at such time or times and at such price or prices and upon such
other terms as the Administrative Agent shall deem appropriate.  The
Administrative Agent shall be authorized at any such sale of securities (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to Persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the Administrative Agent
shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold.  Each such purchaser at any sale of
Collateral shall hold the property sold absolutely, free from any claim or right
on the part of any Grantor, and each Grantor hereby waives (to the extent not
prohibited

 

17

--------------------------------------------------------------------------------

 

by law) all rights of redemption, stay and appraisal which such Grantor now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted.

 

(b)                                 The Administrative Agent shall give the
applicable Grantors ten (10) days’ written notice in advance of any public sale
or in advance of the time after which any private sale is to be made (which each
Grantor agrees is reasonable notice within the meaning of Section 9-611 of the
New York UCC or its equivalent in other jurisdictions) of the Administrative
Agent’s intention to make any sale of Collateral.  Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case of a
sale at a broker’s board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or portion thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Administrative Agent may fix
and state in the notice (if any) of such sale.  At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Administrative Agent may (in its sole and
absolute discretion) determine.  The Administrative Agent shall not be obligated
to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given.  The Administrative Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned.  In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Administrative Agent shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon
like notice.  At any public or private sale made pursuant to this Agreement, any
Secured Party (including the Administrative Agent, for the ratable benefit of
the Secured Parties) may bid for or purchase, free from any right of redemption,
stay, valuation or appraisal on the part of any Grantor (all said rights being
also hereby waived and released to the extent not prohibited by law), the
Collateral or any part thereof offered for sale and may make payment on account
thereof by using any claim then due and payable to such Secured Party from any
Grantor as a credit against the purchase price, and such Secured Party may, upon
compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to any Grantor therefor.  Each Grantor hereby
waives, to the extent permitted by law, any claims against the Administrative
Agent or any Secured Party arising by reason of the fact that the price at which
any Collateral may have been sold at a private sale was less than the price
which might have been obtained at a public sale, even if the Administrative
Agent accepts the first offer received and does not offer such Collateral to
more than one offeree.  For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Administrative Agent shall be free to carry out such sale pursuant to such
agreement and no Grantor shall be entitled to the return of the Collateral or
any portion thereof subject thereto, notwithstanding the fact that, after the
Administrative Agent shall have entered into such an agreement, all Events of
Default shall have been remedied and the Obligations paid in full.  As an
alternative to exercising the power of sale herein conferred upon it, the
Administrative Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court appointed receiver.  Any
sale pursuant to the provisions of this Section 6.3 shall be deemed to conform
to the commercially reasonable standards as provided in Section 9-610(b) of the
New York UCC or its equivalent in other jurisdictions.

 

6.4                               Application of Proceeds.  Pursuant to the
exercise by the Administrative Agent of its remedies or in connection with the
acceleration of the Loans and/or the termination of the Commitments, at any time
at the Administrative Agent’s election, the Administrative Agent may apply all
or any part of Proceeds of any collection or sale of Collateral, including any
Collateral consisting of cash, and any proceeds of the guarantee set forth in
Section 2 in payment of the Obligations in the following order:

 

First, to pay incurred and unpaid fees and expenses of the Administrative Agent
under the Loan Documents;

 

Second, to the Administrative Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations
(including interest), pro rata among the Secured Parties according to the
amounts of the Obligations then due and owing and remaining unpaid to the
Secured Parties;

 

18

--------------------------------------------------------------------------------

 

Third, to the Administrative Agent, for application by it towards prepayment of
the Obligations, pro rata among the Lenders and the Qualified Counterparties in
respect of Specified Hedge Agreements and Specified Cash Management Agreements
according to the amounts of the Obligations then held by each Secured Party
(with any prepayment of Loans being applied, first, to Base Rate Loans and,
second, to Eurocurrency Loans); and

 

Fourth, any balance of such Proceeds remaining after the Obligations shall have
been paid in full, no Letters of Credit shall be outstanding that have not been
cash-collateralized, or that do not have a back stop letter of credit in place,
and the Commitments shall have terminated shall be paid over to the Borrower or
to whomsoever may be lawfully entitled to receive the same.

 

6.5                               Deficiency.  Each Grantor shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay its Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent to collect
such deficiency.

 

6.6                               Subordination.  (a) Each party hereto hereby
agrees that all Indebtedness owed to any Loan Party from any other Loan Party
shall be evidenced by (i) the Intercompany Subordinated Note, (ii) any
promissory notes among Loan Parties listed on Schedule 2 hereto under the
heading “Pledged Notes” or (iii) such other promissory note that is pledged and
promptly delivered to the Administrative Agent; it being understood and agreed
that in respect of any promissory note delivered pursuant to Section 6.6(a)(ii)
or Section 6.6(a)(iii), each Grantor hereby agrees that the terms set forth in
the Intercompany Subordinated Note in respect of payment blockage during the
continuance of certain Events of Default and subordination shall apply to such
promissory note mutatis mutandis, and each Grantor acknowledges that it has
reviewed such provisions of the Intercompany Subordinated Note and agrees to
their applicability, mutatis mutandis, to each such promissory note.

 

(b)                                 Without limiting the foregoing, each Grantor
hereby agrees that, upon the occurrence and during the continuance of an Event
of Default, unless otherwise agreed by the Administrative Agent, all
Indebtedness owing by it to any Subsidiary of the Borrower shall be fully
subordinated to the payment in full in cash of such Grantor’s Obligations.

 

6.7                               Registration Rights.  (a) Upon the occurrence
and during the continuance of an Event of Default, (i) if the Loans (with
accrued interest thereon) and all other amounts owing under the Loan Documents
have become due and payable in accordance with the Credit Agreement and (ii) if
the Administrative Agent shall determine to exercise its right to sell any or
all of the Pledged Stock pursuant to Section 6.3, and if in the opinion of the
Administrative Agent it is necessary or advisable to have the Pledged Stock, or
that portion thereof to be sold, registered under the provisions of the
Securities Act, the relevant Grantor will cause the Issuer thereof to
(x) execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof to
be sold, under the provisions of the Securities Act, (y) use its commercially
reasonable efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the Pledged Stock, or that portion thereof to be
sold, and (z) make all amendments thereto and/or to the related prospectus
which, in the opinion of the Administrative Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto.  Each
Grantor agrees to cause such Issuer to comply with the provisions of the
securities or “Blue Sky” laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.

 

(b)                                 Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities Act
and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof.  Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made

 

19

--------------------------------------------------------------------------------

 

in a commercially reasonable manner.  The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.

 

(c)                                  Each Grantor agrees to use its commercially
reasonable efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the Pledged Stock
pursuant to this Section 6.7 valid and binding and in compliance with any and
all other applicable Requirements of Law.  Each Grantor further agrees that a
breach of any of the covenants contained in this Section 6.7 will cause
irreparable injury to the Administrative Agent and the Secured Parties, that the
Administrative Agent and the Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.7 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred and is continuing under the Credit
Agreement.

 

6.8                               Grant of Intellectual Property License. 
During the continuance of an Event of Default, for the purpose of enabling the
Administrative Agent to exercise the rights and remedies under this Agreement at
such time as the Administrative Agent shall be lawfully entitled to exercise
such rights and remedies, each Grantor hereby (a) grants to the Administrative
Agent, for the benefit of the Administrative Agent and the Secured Parties, a
nonexclusive license (exercisable without payment of royalty or other
compensation to any Grantor) to use, license or sublicense any Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same
may be located, and including in such license access to all media in which any
of the licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof, the right to prosecute
and maintain all Intellectual Property included in the Collateral and the right
to sue for past infringement of such Intellectual Property; and (b) agrees that
the Administrative Agent may sell any of such Grantor’s Inventory directly to
any person, including without limitation persons who have previously purchased
the Grantor’s Inventory from such Grantor and in connection with any such sale
or other enforcement of the Administrative Agent’s rights under this Agreement,
may sell Inventory which bears any Trademark included in the Collateral and any
Inventory that is covered by any Copyright included in the Collateral and the
Administrative Agent may finish any work in process and affix any Trademark
included in the Collateral and sell such Inventory as provided herein.

 

6.9                               Additional Credit-Bidding Rights of the
Administrative Agent.  For the avoidance of doubt, each of the Grantors and, by
their acceptance of the terms hereof, each of the Secured Parties, agrees that
the Administrative Agent shall have the right to “credit bid” the allowed amount
of the Obligations during any sale of any of the Loan Parties’ assets pledged as
Collateral, including without limitation, sales occurring pursuant to section
363 of the Bankruptcy Code or included as part of any plan subject to
confirmation under section 1129(b)(2)(A)(iii) of the Bankruptcy Code.

 

Section 7.                                           THE ADMINISTRATIVE AGENT

 

7.1                               Administrative Agent’s Appointment as
Attorney-in-Fact, etc.  (a) Each Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:

 

(i)                                     in the name of such Grantor or its own
name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
under any Receivable or with respect to any other Collateral and file any claim
or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Receivable or with respect to
any other Collateral whenever payable;

 

20

--------------------------------------------------------------------------------

 

(ii)                                  in the case of any Intellectual Property,
execute and deliver, and record or have recorded, any and all agreements,
instruments, financing statements, documents and papers as the Administrative
Agent may request (A) to evidence the Administrative Agent’s and the Secured
Parties’ security interest in such Intellectual Property, and (B) to perfect
such security interest;

 

(iii)                               pay or discharge taxes and Liens levied or
placed on or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;

 

(iv)                              execute, in connection with the exercise of
any right or remedy provided for in Section 6.3 or 6.7, any indorsements,
assignments or other instruments of conveyance or transfer with respect to the
Collateral; and

 

(v)                                 (1)  direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral;
(3) sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral;
(5) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate; (7) assign any
Intellectual Property, throughout the world for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make any
agreement with respect to, or consent to any use of cash collateral arising in
respect of or otherwise deal with, any of the Collateral as fully and completely
as though the Administrative Agent were the absolute owner thereof for all
purposes, and do, at the Administrative Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things which the
Administrative Agent deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent’s and the Secured Parties’ security
interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

 

Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a)  (other than any rights set
forth in clause (ii) of Section 7.1(a)) unless an Event of Default shall have
occurred and be continuing.

 

(b)                                 After an Event of Default shall have
occurred and be continuing, if any Grantor fails to perform or comply with any
of its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.

 

(c)                                  The expenses of the Administrative Agent
incurred in connection with actions undertaken as provided in this Section 7.1,
together with interest thereon at a rate per annum equal to the then applicable
rate per annum at which interest would then be payable on any category of past
due Revolving Credit Loans that are Base Rate Loans under the Credit Agreement,
from the date of payment by the Administrative Agent to the date reimbursed by
the relevant Grantor, shall be payable by such Grantor to the Administrative
Agent on demand.

 

(d)                                 Each Grantor hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof.  Each Secured
Party, by its authorization of the Administrative Agent’s entering into this
Agreement, consents to the exercise by the Administrative Agent of any power,
right or remedy provided for herein.  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

 

21

--------------------------------------------------------------------------------

 

7.2                               Duty of Administrative Agent.  The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner as
the Administrative Agent deals with similar property for its own account.  The
Administrative Agent, any Secured Party and each of their respective officers,
directors, employees or agents shall not be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof unless with respect
to a Person, such failure constitutes bad faith, gross negligence, willful
misconduct or fraud of such Person as determined in a final non-appealable
judgment by a court of competent jurisdiction.  The powers conferred on the
Administrative Agent and the Secured Parties hereunder are solely to protect the
Administrative Agent’s and the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Administrative Agent or any Secured Party to
exercise any such powers.  The Administrative Agent and the Secured Parties
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for their (or their officers, directors,
employees or agents’) own bad faith, gross negligence or willful misconduct as
determined in a final non-appealable judgment by a court of competent
jurisdiction.

 

7.3                               Financing Statements.  Pursuant to any
applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement.  Each Grantor authorizes the Administrative Agent to use the
collateral description “all assets” or “all personal property” or “all assets of
the Debtor, whether now existing or hereinafter arising” or words of similar
effect in any such financing statements.

 

7.4                               Authority of Administrative Agent.  Each
Grantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Secured Parties, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Grantors, the Administrative Agent shall be conclusively presumed to be acting
as agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority. The Administrative
Agent may only exercise the remedies provided for herein as permitted under or
required by Section 10 of the Credit Agreement.

 

Section 8.                                           MISCELLANEOUS

 

8.1                               Amendments in Writing.  None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Sections 8.6 and 12.1 of the Credit
Agreement.

 

8.2                               Notices.  All notices, requests and demands to
or upon the Administrative Agent or any Grantor hereunder shall be effected in
the manner provided for in Section 12.2 of the Credit Agreement; provided that
any such notice, request or demand to or upon any Guarantor shall be addressed
to such Guarantor at its notice address set forth on Schedule 1.

 

8.3                               No Waiver by Course of Conduct; Cumulative
Remedies.  Neither the Administrative Agent nor any Secured Party shall by any
act (except by a written instrument pursuant to Section 8.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default.  No failure to exercise,
nor any delay in exercising, on the part of the Administrative Agent or any
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof.  No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.  A waiver by the Administrative Agent or
any

 

22

--------------------------------------------------------------------------------

 

Secured Party of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Administrative Agent or such
Secured Party would otherwise have on any future occasion.  The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.

 

8.4                               Enforcement Expenses; Indemnification. 
(a) Subject to the limitations set forth in Section 12.5 of the Credit
Agreement, each Guarantor agrees to pay or reimburse each Secured Party and the
Administrative Agent for all its costs and expenses incurred in collecting
against such Guarantor under the guarantee contained in Section 2 or otherwise
enforcing or preserving any rights under this Agreement and the other Loan
Documents to which such Guarantor is a party, including, without limitation, the
fees and disbursements of counsel to the Administrative Agent.

 

(b)                                 Each Guarantor agrees to pay, and to save
the Administrative Agent harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement to the extent the Borrower would be required to do so pursuant to
Section 12.5 of the Credit Agreement.

 

(c)                                  Each Guarantor agrees to pay, and to save
the Administrative Agent and the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 12.5 of the Credit Agreement.

 

(d)                                 The agreements in this Section 8.4 shall
survive repayment of the Obligations and all other amounts payable under the
Credit Agreement and the other Loan Documents.

 

8.5                               Successors and Assigns.  This Agreement shall
be binding upon the successors and assigns of each Grantor and shall inure to
the benefit of the Administrative Agent and the Secured Parties and their
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent.

 

8.6                               Set-Off.  Subject to Section 12.21 of the
Credit Agreement, in addition to any rights and remedies of the Secured Parties
provided by law, each Secured Party shall have the right, without prior notice
to such Grantor or any other Grantor, any such notice being expressly waived by
each Grantor to the extent permitted by applicable law, after the occurrence and
during the continuance of an Event of Default upon any amount becoming due and
payable by the Borrower and each Grantor hereunder (whether at the stated
maturity, by acceleration or otherwise), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final but not including any deposits in Excluded Accounts), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Secured Party or any branch or
agency thereof to or for the credit or the account of such Grantor, as the case
may be.  Each Secured Party agrees promptly to notify Parent and the
Administrative Agent after any such set-off and application made by such Secured
Party, provided that the failure to give such notice shall not affect the
validity of such set-off and application.  The rights of the Administrative
Agent and each Secured Party under this Section 8.6 are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which the Administrative Agent or such Secured Party may have.

 

8.7                               Counterparts.  This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy or other electronic transmission), and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.

 

8.8                               Severability.  Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

23

--------------------------------------------------------------------------------

 

8.9                               Section Headings.  The Section headings used
in this Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.

 

8.10                        Integration.  This Agreement and the other Loan
Documents represent the agreement of the Grantors, the Administrative Agent and
the Secured Parties with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Secured Party relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.  Notwithstanding the foregoing, those certain provisions set forth in
that certain engagement letter among Parent, Borrower and Wells Fargo
Securities, LLC dated as of November 23, 2011 that expressly survive the
termination of such engagement letter and the entering into of definitive
financing documentation shall survive the entering into of this Agreement and
the other Loan Documents.  In the event of any conflict between the terms of
this Agreement and the provisions of the Credit Agreement, the provisions of the
Credit Agreement shall control.

 

8.11                        GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

 

8.12                        WAIVER OF JURY TRIAL.  EACH GRANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

 

8.13                        Credit Agreement Provisions.  Each of the Agents,
the Secured Parties and each Grantor hereby agrees that Section 12.13
(Submission to Jurisdiction; Waivers), Section 12.14 (Acknowledgements) and
Section 12.16 (Release of Collateral and Guarantee Obligations) of the Credit
Agreement shall be applicable to this Agreement mutatis mutandis, and each of
such parties acknowledges that it has reviewed such provisions and agrees to
their applicability, mutatis mutandis, hereto.

 

8.14                        Additional Guarantors and Grantors.  Each Subsidiary
of Parent that is required to become a party to this Agreement pursuant to
Section 8.6 of the Credit Agreement shall become a Guarantor and a Grantor for
all purposes of this Agreement upon execution and delivery by such Subsidiary of
an Assumption Agreement substantially in the form of Annex I hereto.

 

[Remainder of Page Left Intentionally Blank]

 

24

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

 

 

SIX FLAGS ENTERTAINMENT CORPORATION,

 

as Parent

 

 

 

 

By:

/s/ John M. Duffey

 

Name:  John M. Duffey

 

Title:  Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

 

SIX FLAGS OPERATIONS INC.,

 

as Holdings

 

 

 

 

 

 

 

By:

/s/ John M. Duffey

 

Name:  John M. Duffey

 

Title:  Executive Vice President and Chief Financial Officer

 

 

 

 

SIX FLAGS THEME PARKS INC.,

 

  as Borrower

 

 

 

 

 

 

 

By:

/s/ John M. Duffey

 

Name:  John M. Duffey

 

Title:  Executive Vice President and Chief Financial Officer

 

--------------------------------------------------------------------------------

 

 

FIESTA TEXAS, INC.

 

FUNTIME, INC.

 

FUNTIME PARKS, INC.

 

GREAT AMERICA LLC

 

GREAT ESCAPE HOLDING INC.

 

HURRICANE HARBOR GP LLC

 

HURRICANE HARBOR LP LLC

 

MAGIC MOUNTAIN LLC

 

PARK MANAGEMENT CORP.

 

PREMIER INTERNATIONAL HOLDINGS INC.

 

PREMIER PARKS HOLDINGS INC.

 

PREMIER PARKS OF COLORADO INC.

 

RIVERSIDE PARK ENTERPRISES, INC.

 

SF HWP MANAGEMENT LLC

 

SIX FLAGS AMERICA PROPERTY CORPORATION

 

SIX FLAGS GREAT ADVENTURE LLC

 

SIX FLAGS SERVICES, INC.

 

SIX FLAGS SERVICES OF ILLINOIS, INC.

 

SIX FLAGS ST. LOUIS LLC

 

SOUTH STREET HOLDINGS LLC

 

STUART AMUSEMENT COMPANY

 

 

 

 

By:

/s/ John M. Duffey

 

Name:  John M. Duffey

 

Title:  Executive Vice President and Chief Financial Officer

 

--------------------------------------------------------------------------------

 

 

HURRICANE HARBOR LP

 

 

 

By:

Hurricane Harbor GP LLC,

 

 

its General Partner

 

 

 

By:

/s/ John M. Duffey

 

Name:  John M. Duffey

 

Title:  Executive Vice President and Chief Financial Officer

 

 

 

SIX FLAGS AMERICA LP

 

 

 

By:

Funtime, Inc.,

 

 

its General Partner

 

 

 

By:

/s/ John M. Duffey

 

Name:  John M. Duffey

 

Title:  Executive Vice President and Chief Financial Officer

 

 

 

SIX FLAGS GREAT ESCAPE LP

GREAT ESCAPE THEME PARKS L.P.

GREAT ESCAPE RIDES L.P.

 

 

 

By:

Great Escape Holdings Inc.,

 

 

their General Partner

 

 

 

By:

/s/ John M. Duffey 

 

Name:  John M. Duffey

 

Title:  Executive Vice President and Chief Financial Officer

 

--------------------------------------------------------------------------------

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lender

 

 

 

 

 

By:

/s/ Reginald M. Goldsmith, III

 

 

Name:  Reginald M. Goldsmith, III

 

 

Title:  Managing Director

 

--------------------------------------------------------------------------------