his time during the Company’s normal business hours. Such assistance, advice and cooperation mayinclude, but shall not be limited to the preparation for, or the conduct of, any litigation,investigation or proceeding involving matters or events which occurred during the Executive’semployment by the Company as to which the Executive’s knowledge or testimony may be important tothe Company. In connection with the preparation for, or the conduct of such litigation,investigation or proceeding as described in the preceding sentence, the Executive shall promptlyprovide the Company with any records or other materials in his possession that the Company shallrequest in connection with the defense or prosecution of such litigation, investigation orproceeding. The Executive shall cease providing Additional Services to the Company upon receipt ofwritten notice (a “Cessation Notice”) from the Company that the Additional Services are nolonger required. The Company shall pay or reimburse the Executive for his travel expensesreasonably incurred in the course of providing such Additional Services. The Company shall makesuch payment or reimbursement within thirty (30) days of receipt of reasonable substantiatingdocumentation from the Executive but in no event later than the end of the calendar year followingthe year in which such expenses were incurred. The Company acknowledges that the Executive may beunavailable to provide Additional Services for substantial periods from time to time, includingduring a four-week vacation planned for September, 2008, or may be unwilling to provide AdditionalServices from time to time or at all times after the Separation Date.     3. **Covenants by the Executive****.**          a. Trade Secrets          (i) General. The Executive agrees that the Executive will hold in a fiduciarycapacity for the benefit of the Company and each of its affiliates, and will not directly orindirectly use or disclose to any person not authorized by the Company, any Trade Secret (asdefined in Section 3(a)(ii)) of the Company or its affiliates that Executive may haveacquired (whether or not developed or compiled by Executive and whether or not Executive isauthorized to have access to such information) during the term of, and in the course of, oras a result of Executive’s employment by the Company or its affiliates for so long as suchinformation remains a Trade Secret.          (ii) Trade Secret. The term “Trade Secret” for purposes of thisEmployment Agreement means information, including, but not limited to, technical ornontechnical data, a formula, a pattern, a compilation, a program, a device, a method, atechnique, a drawing, a process, financial data, financial plans, product plans, or a listof actual or potential customers or suppliers that (a) derives economic value, actual orpotential, from not being generally known to, and not being generally readily ascertainableby proper means by, other persons who can obtain economic value from its disclosure or useand (b) is the subject of reasonable efforts by the Company and its affiliates to maintainits secrecy.          (iii) Additional Rights. This Section 3(a) is intended to provide rights tothe Company and its affiliates which are in addition to, not in lieu of, those rights the
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Company and its affiliates have under the common law or applicable statutes for theprotection of trade secrets.          b. Confidential Information.          (i) General. The Executive during the Restricted Period (as defined inSection 3(c)) shall hold in a fiduciary capacity for the benefit of the Company and itsaffiliates, and shall not directly or indirectly use or disclose to any person notauthorized bythe Company, any Confidential Information (as defined inSection 3(b)(ii)) of the Company or its affiliates that the Executive may have acquired(whether or not developed or compiled by the Executive and whether or not the Executive isauthorized to have access to such information) during the term of, and in the course of, oras a result of the Executive’s employment by the Company or its affiliates.          (ii) Confidential Information. The term “Confidential Information” forpurposes of this Agreement means any secret, confidential or proprietary informationpossessed by the Company or its affiliates relating to their businesses, including, withoutlimitation, customer lists, details of client or consultant contracts, current andanticipated customer requirements, pricing policies, price lists, market studies, businessplans, operational methods, marketing plans or strategies, product development techniques orflaws, computer software programs (including object codes and source codes), data anddocumentation, base technologies, systems, structures and architectures, inventions andideas, past, current and planned research and development, compilations, devices, methods,techniques, processes, future business plans, licensing strategies, advertising campaigns,financial information and data, business acquisition plans and new personnel acquisitionplans (not otherwise included in the definition of a Trade Secret under this Agreement) thathas not become generally available to the public by the act of one who has the right todisclose such information without violating any right of the Company or its affiliates.          (iii) Additional Rights. This Section 3(b) is intended to provide rights tothe Company and its affiliates which are in addition to, not in lieu of, those rights theCompany and its affiliates have under the common law or applicable statutes for theprotection of confidential information.          c. Restricted Period. The term “Restricted Period” for purposes of thisAgreement shall mean the one-year period following the Separation Date.          d. Nonsolicitation of Customers or Employees.          (i) Customers. During the Restricted Period, the Executive shall not, on theExecutive’s own behalf or on behalf of any person, firm partnership, association,corporation or business organization, entity or enterprise, call on or solicit for thepurpose of competing with the Company or its affiliates any customers of the Company or itsaffiliates with whom the Executive had contact, knowledge, or association at any time
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during the twelve (12) month period immediately preceding the beginning of theRestricted Period.          (ii) Employees. During the Restricted Period, the Executive shall not, eitherdirectly or indirectly, call on, solicit or attempt to induce any other officer, employee orindependent contractor of the Company or its affiliates with whom the Executive had contact,knowledge of, or association at any time during the twelve (12) month period immediatelypreceding the beginning of the Restricted Period, to terminate his or her employment orbusiness relationship with the Company or its or its affiliates and shall not assist anyother person or entity in such a solicitation.          e. Non-Compete. The Executive and the Company agree that (i) the Company is engagedin the family entertainment resort business featuring indoor waterparks, which shall be referred toas the “Business,” (ii) the Business can be conducted anywhere, (iii) the Business can beand is available to any person or entity with access to sufficient capital, (iv) the Businessconsequently has no geographic boundary or limitation, (v) the Executive is, and has been duringthe term of his employment with the Company, intimately involved in the Business wherever itoperates, and (vi) this Section 3(e) is intended to provide fair and reasonable protection to theCompany in light of the unique circumstances of the Business. The Executive therefore agrees thatExecutive shall not for the one (1) year period which starts on the Separation Date compete withthe Company within fifty (50) miles of a location where the Company conducts its Business or isplanning to conduct its Business; provided, however, the Executive may own up to five percent (5%)of the stock of a publicly traded company that engages in such competitive business so long as theExecutive is only a passive investor and is not actively involved in such company in any way.          f. Reasonable and Continuing Obligations. The Executive agrees that the Executive’sobligations under this Section 3 are obligations which will continue beyond the date theExecutive’s employment terminates and that such obligations are reasonable and necessary to protectthe Company’s legitimate business interests. The Company in addition shall have the right to takesuch other action as the Company deems necessary or appropriate to compel compliance with theprovisions of this Section 3.          g. Remedy for Breach. The Executive agrees that the remedies at law of the Companyfor any actual or threatened breach by the Executive of the covenants in this Section 3 would beinadequate and that the Company shall be entitled to specific performance of the covenants in thisSection 3, including entry of an ex parte, temporary restraining order in state or federal court,preliminary and permanent injunctive relief against activities in violation of this Section 3, orboth, or other appropriate judicial remedy, writ or order, in addition to any damages and legalexpenses which the Company may be legally entitled to recover. The Executive acknowledges andagrees that the covenants in this Section 3 shall be construed as agreements independent of anyother provision of this or any other agreement between the Company and the Executive, and that theexistence of any claim or cause of action by the Executive against the Company, whether predicatedupon the Employment Agreement, this Agreement or any other agreement, shall not constitute adefense to the enforcement by the Company of such covenants.
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     4. **Consideration**.          a. In consideration of the execution and performance of this Agreement by the Executive, andsubject to the remaining provisions of this Section 4, the Executive will receive from the Companythe following severance payments and benefits:          i. The Company shall pay to the Executive the sum of $432,500.00, payable in a lumpsum within five days of expiration of the 7-day revocation period referred to in Section 6hereof.          ii. From and after the Separation Date, commencing on the date specified in eachAdditional Services Notice, and prior to the date specified in the related Cessation Notice,the Company shall pay to the Executive the sum of $26,650.00 for each one-month period thatExecutive is performing consulting services as set forth in Section 2 of this Agreement,prorated for each partial month, payable monthly, in arrears, no later than ten (10) daysafter the end of each such month or partial month.          iii. At the discretion of the Chief Executive Officer of the Company, the Executive maybe entitled to a bonus of up to $100,000, provided that the Executive is providingAdditional Services through December 31, 2008.
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          b. All payments under this Section 4 shall be subject to applicable deductions. For thepurposes of this Agreement, “applicable deductions” shall include, but shall not be limitedto, any federal, state, or local taxes determined by the Company to be required to be withheld fromamounts paid to the Executive pursuant to this Agreement or otherwise due from the Company, and anyother amounts that the Company may be legally required to deduct from his earnings.          c. Any date specified as a payment date under this Section 4 shall be construed as meaning anydate on or about the specified date; provided, however, that the Company shall make payment as soonas practicable after the specified date without, to the extent possible, incurring any taxpenalties on either the Executive or the Company.          d. Except as provided in this Agreement, the Executive agrees that he is not entitled to anyother compensation (including, but not limited to, salary or bonuses), perquisites, or benefits ofany kind or description from the Company, or from or under any employee benefit plan or fringebenefit plan sponsored by the Company or under the Employment Agreement, other than as describedabove and other than his regular salary through the Separation Date, as defined in Section 1 ofthis Agreement. The consideration paid by the Company to the Executive pursuant to this Agreementshall be in compromise, settlement and full satisfaction of any and all Claims, as defined inSection 5 of this Agreement, that the Executive has, or may have, against the Company or otherReleasees, as defined in Section 5 of this Agreement, arising out of the Executive’s employmentwith the Company or its affiliates, the termination of such employment and any and all mattersrelated to the Executive’s employment and termination, or to his Employment Agreement.     5. **Mutual Release**.          a. The Executive, for himself, his heirs, successors and assigns and in consideration of thepayments to be made by or on behalf of the Company pursuant to Section 4 of this Agreement, doeshereby forever discharge and release the Company, any subsidiaries, affiliated companies, companieswith common management, ownership or control, successors, assigns, insurers and reinsurers,attorneys, and franchisees, and all of their officers, directors, shareholders, employees, agentsand representatives, in their official and individual capacities (collectively referred to as“Releasees”), from any and all claims, demands, causes of action, damages, charges,complaints, grievances, expenses, compensation and remedies which the Executive now has or may inthe future have on account of or arising out of any matter or thing which has happened, developedor occurred before the date of this Agreement (collectively “Claims”), including, but notlimited to, all Claims arising from the Executive’s employment with the Company or any of itsaffiliated companies, the termination of such employment, any and all relationships or dealingsbetween the Executive and the Company or any of the other Releasees, the termination of any suchrelationships and dealings, and any and all other Claims the Executive may have against the Companyor any of the other Releasees, and the Executive hereby waives any and all such Claims including,all charges or complaints that were or could have been filed with any other court, tribunal orgovernmental agency, and any and all Claims not previously alleged, including, but not limited to,any Claims under the following: (a) Title VII of the Civil Rights Act of 1964, as amended; (b) theAge Discrimination in Employment Act
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(ADEA), as amended; (c) the Federal Employee Retirement Income Security Act of 1974 (ERISA),as amended; (d) the Americans With Disabilities Act (ADA), as amended; (e) the Consolidated OmnibusBudget Reconciliation Act of 1985 (COBRA), as amended; (f) Section 806 of the Sarbanes-Oxley Act of2002, as amended; (g) any and all statutes of similar nature or purpose under Delaware or Wisconsinlaw, or the law of any other state; and (h) any federal, state or local law, rule, regulation,constitution, executive order or guideline of any description, including, but not limited to, thoselaws described above, or any rule or principle of equity or common law, or any Claim of defamation,conversion, interference with a contract or business relationship, or any other intentional orunintentional tort, or any Claim of loss of consortium, or any Claim of harassment or retaliation,or breach of contract or implied contract, or breach of covenant of good faith and fair dealing, orany whistle-blower Claim. This release, discharge and waiver shall be hereinafter referred to asthe “Release.”          Notwithstanding the foregoing, Executive shall have the right to assert defenses andcounterclaims against any individuals referenced in this subparagraph in connection with any claimthat might be asserted against Executive by any of them, in which case this Release shall notpreclude the assertion of any defenses or counterclaims that are otherwise the subject of thisRelease.          b. The Company similarly releases the Executive and his agents, attorneys, heirs and assignsfrom any and all Claims as defined above, whether known or unknown, which the Company has, had ormight have been able to assert or make based on any action, omission or conduct of any kind on thepart of the Executive or his agents, attorneys, heirs or assigns from the beginning of time up tothe execution of this Agreement.          c. The Executive agrees that this Release may be enforced in federal, state or local court,and before any federal, state or local administrative agency or body.          d. This Release does not prohibit the Executive from filing an administrative charge ofalleged employment discrimination, harassment or retaliation under Title VII of the Civil RightsAct of 1964, the Age Discrimination in Employment Act of 1967, the Americans With Disabilities Actor the Equal Pay Act of 1963; however, the Executive represents that he has not to date filed orcause to be filed any such administrative charge, and further agrees that he hereby waives anyright to monetary or other recovery should any federal, state or local administrative agency pursueany Claim on his behalf and will immediately request in writing that the Claim or matter on hisbehalf be withdrawn. Thus by signing this Agreement, the Executive waives any right he had toobtain a recovery if an administrative agency pursues a Claim against the Company or any of theother Releasees based on any action taken by the Company or any of the other Releasees up to thedate of this Agreement, and that he will have released the Company and the other Releasees of anyand all Claims, and the continuing effect of any and all Claims of any nature up to the date ofthis Agreement.          e. The Executive specifically understands and agrees that the termination of his employmentdoes not violate or disregard any oral or written promise or agreement, of any nature whatsoever,express or implied. If any contract or agreement of employment exists concerning the employment ofthe Executive by the Company or the terms and conditions of
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such employment or the termination of such employment, whether oral or written, express orimplied, that contract or agreement (including the Employment Agreement) is hereby terminated andis null and void.     6. **Compliance with OWBPA.** It is the mutual intent of the parties that this Agreement,as it applies to claims under the ADEA, fully complies with the Older Worker Benefit Protection Act(OWBPA). Accordingly, this Agreement requires, and Executive agrees, as follows:          a. Executive has read this Agreement, understands its contents and agrees to its terms andconditions of his own free will. He understands this Agreement and its language.          b. Executive acknowledges that this Agreement provides him with pay and benefits to which hewould not otherwise be entitled.          c. Executive is hereby advised to consult with an attorney prior to signing this Agreement.          d. Executive has twenty-one (21) days in which to consider whether to sign this Agreement.          e. After Executive signs this Agreement, he shall have seven (7) days in which to revoke hisacceptance of this Agreement by delivering written notice to the Company.          f. This Agreement is not enforceable and effective until the seven (7) day revocation periodhas expired without revocation. In computing this seven-day period, the day the Agreement isexecuted by Executive shall not be included, and the last day of the seven-day period shall beincluded.     7. **Additional Terms**.          a. Nothing contained in this Agreement prohibits the Executive from seeking a determination bya court of competent jurisdiction that the Release is, in whole or in part, invalid underapplicable law. To the extent of such determination, the Executive may assert Claims or othermatters included in the Release, subject to final determination on appeal.          b. The Executive agrees that he has not sustained any disabling personal injury and/oroccupational disease which has resulted in a loss of wage earning capacity during his employmentwith the Company, and that he has no personal injury and/or occupational disease which has beencontributed to, or aggravated or accelerated in a significant manner by his employment with theCompany.          c. The Executive represents and warrants that the Company has encouraged and advised theExecutive in writing, prior to signing this Agreement, to consult with an attorney of theExecutive’s choosing concerning all of the terms of this Agreement.
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          d. Nothing contained in this Agreement is intended to be an admission of any fault,wrongdoing, or liability on the part of any of the parties hereto, and nothing contained in thisAgreement may be deemed, construed, or treated in any respect as such an admission. The Companyspecifically denies any fault, wrongdoing or liability toward the Executive. This Agreement wasreached by the parties as a mutual compromise of their respective positions, in order to avoid thecosts and inconvenience of litigation and for other reasons deemed good and sufficient by therespective parties.          e. The Company will provide the Executive and the Executive’s spouse with the right toparticipate, at the Executive’s expense, in the Company’s group health insurance plan in accordancewith the mandates of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (a/k/a“COBRA”).          f. The Executive will retain all of his vested rights, if any, as of the Separation Date inthe Company’s 401(k) plan and Deferred Compensation plan.     8. **Indemnification****.**The Executive shall be entitled to be indemnified by the Companyto the same extent and subject to the same limitations as the Company provides indemnificationgenerally to its officers and directors for acts occurring on or prior to the Separation Date. TheCompany agrees to maintain in force a policy of directors and officers liability coverage in suchamounts as the Company’s Board of Directors deems reasonable and to cover the Executive under suchpolicy, for acts occurring on or prior to the Separation Date, subject to any such insurance beingavailable on commercially reasonable terms.     9. **Non-Disparagement**. The Executive shall not disparage the Company or otherReleasees, or its officers, directors or employees in any way orally or in writing. The Companyshall, and the Company shall take reasonable measures to cause its directors and officers torefrain from disparaging the Executive in any way, orally or in writing.     10. **Employment References**. Nothing in this Agreement shall prevent either party fromstating the fact that Executive was employed by the Company, the address of his work location, thedates of his employment, his job titles and job duties, his rate of pay, or that he resigned fromhis position as an officer of the Company on or about the Separation Date. The Company willprovide employment references upon Executive’s request on the condition that Executive sign anotice and release provided by the Company.     11. **Breach of Agreement**. The Executive agrees that if he violates any of the terms ofthis Agreement, the Company may pursue whatever rights it has under this Agreement, whether in lawor in equity, without affecting the validity and enforceability of the Release contained in thisAgreement.     12. **Company Property, Records, Files and Equipment**. The Executive will return allCompany property, records, files, or any other Company owned equipment in his possession withinthree (3) days after the Separation Date.
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     13. **Governing Law**. This Agreement shall be governed by and construed in accordancewith the laws of the State of Wisconsin applicable to contracts executed in and to be performed inthat state without regard to its conflicts of laws provisions. Each of the parties herebyirrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts ofthe State of Wisconsin located in the County of Dane, Wisconsin, and of the United States for theWestern District of Wisconsin for any litigation arising out of or relating to this Agreement orthe transactions contemplated hereby. Each of the parties hereby irrevocably and unconditionallyacknowledges that service of any process, summons, notice or document by United States registeredmail to the respective addresses set forth herein shall be effective service of process for anylitigation brought against a party in any such court. Any legal action relating to this Agreementshall be brought in the courts of the State of Wisconsin located in the County of Dane, Wisconsin,and of the United States for the Western District of Wisconsin and the parties irrevocably andunconditionally waive and will not plead or claim in any such court that venue is improper or thatsuch litigation has been brought in an inconvenient forum.     14. **Waiver**. The waiver by a party hereto of any breach by the other party hereto ofany provision of this Agreement shall not operate or be construed as a waiver of any other orsubsequent breach by a party hereto.     15. **Assignment**. This Agreement shall be binding upon and inure to the benefit of thesuccessors and assigns of the Company, and the Company shall be obligated to require any successorto expressly acknowledge and assume its obligations hereunder. This Agreement shall inure to theextent provided hereunder to the benefit of and be enforceable by the Executive or the Executive’slegal representatives, executors, administrators, successors, heirs, distributees, devisees andlegatees. The Executive may not delegate any of the Executive’s duties, responsibilities,obligations or positions hereunder to any person and any such purported delegation shall be voidand of no force and effect.     16. **Severability**. Whenever possible, each provision of this Agreement shall beinterpreted in such a manner as to be effective and valid under applicable law, but if anyprovision of this Agreement is held to be invalid under applicable law, such provision shall beineffective only to the extent of such prohibition or invalidity, without invalidating theremainder of such provision or the remaining provisions of this Agreement.
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     17. **Notices**. Any notices required or permitted to be given under this Agreement shallbe sufficient if in writing, and if personally delivered or when sent by first class certified orregistered mail, postage prepaid, return receipt requested — in the case of the Executive, to hisprincipal residence address, and in the case of the Company, to the address of its principal placeof business as set forth above, to the attention of the Chief Executive Officer of the Company.     18. **Entire Agreement**. This Agreement constitutes the entire agreement of the partiesrelating to the subject matter hereof, and supersedes any obligations of the Company and the otherReleasees under any previous agreements or arrangements (including the Employment Agreement),except as otherwise provided in this Agreement. The provisions of this Agreement may not beamended, modified, repealed, waived, extended or discharged except by an agreement in writingsigned by the party against whom enforcement of any amendment, modification, repeal, waiver,extension or discharge is sought. This Agreement may be executed in one or more counterparts(including by facsimile signature), all of which shall be considered one and the same instrument,and shall be fully executed when one or more counterparts have been signed by and delivered to eachparty.     19. **Headings**. The descriptive headings used herein are used for convenience ofreference only and shall not constitute a part of this Agreement.     **THE EXECUTIVE HEREBY EXPRESSLY WARRANTS AND REPRESENTS THAT, BEFORE ENTERING INTO THISAGREEMENT, HE HAS RECEIVED A REASONABLE PERIOD OF TIME WITHIN WHICH TO CONSIDER ALL OF THEPROVISIONS CONTAINED IN THIS AGREEMENT, THAT HE HAS FULLY READ, INFORMED HIMSELF OF AND UNDERSTANDSALL THE TERMS, CONTENTS, CONDITIONS AND EFFECTS OF ALL PROVISIONS OF THIS AGREEMENT, AND THAT HECONSIDERS ALL SUCH PROVISIONS TO BE SATISFACTORY.**     **THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT NO PROMISE OR REPRESENTATION OFANY KIND HAS BEEN MADE, EXCEPT THOSE EXPRESSLY STATED IN THIS AGREEMENT.**     **THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT HE ENTERS INTO THIS AGREEMENTKNOWINGLY AND VOLUNTARILY.**
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     **IN WITNESS WHEREOF,**the Executive and the Company, by its duly authorized representative, havesigned this Agreement as of the date set forth above.       THE EXECUTIVE:                       Name: Hernan Martinez         GREAT WOLF RESORTS, INC.                       Name:  
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