Exhibit 10.3
 Execution Copy

                          TRADEMARK SECURITY AGREEMENT

     This SECURITY  AGREEMENT (this "Security  Agreement"),  dated as of May 14,
2001, made by MARVEL ENTERPRISES,  INC., a Delaware corporation (the "Borrower")
and the GUARANTORS party hereto (the "Guarantors"),  in favor of CITIBANK, N.A.,
as  Collateral  Agent (the  "Collateral  Agent")  for the several  lenders  (the
"Lenders") from time to time parties to the Credit Agreement (as defined below).
The Borrower and the Guarantors are sometimes referred to herein individually as
a "Grantor" and collectively as the "Grantors."

                              W I T N E S S E T H:
                               - - - - - - - - - -

     WHEREAS,  pursuant  to a Credit  Agreement  dated as of April 1,  1999,  as
amended on each of March 21, 2000,  June 1, 2000 and August 9, 2000 (the "Credit
Agreement"),  among the Borrower,  the Guarantors,  the Lenders,  the Agent, the
Collateral Agent and the Issuer, the Lenders have severally agreed to make loans
to, and the Issuer has  agreed to issue and  certain of the other  Lenders  have
agreed to participate in letters of credit for the account of, the Borrower upon
the terms and subject to the conditions set forth therein;

     WHEREAS,  certain Events of Default have occurred and are continuing  under
the  Credit  Agreement  and the  Borrower  has  requested  that the  Agent,  the
Collateral  Agent, the Issuer and the Lenders waive such Events of Default.  The
Agent,  the  Collateral  Agent,  the Issuer and the Lenders are willing to waive
such Events of Default,  but only on the terms and  conditions  set forth in the
Waiver Agreement dated as of the date hereof among the Borrower, the Guarantors,
the  Agent,  the  Collateral  Agent,  the Issuer and the  Lenders  (the  "Waiver
Agreement"); and

     WHEREAS,  the  execution  and  delivery  of this  Security  Agreement  is a
condition precedent to the effectiveness of the Waiver Agreement;

     NOW, THEREFORE, in consideration of the premises and to induce the Lenders,
the  Agent,  the  Collateral  Agent  and the  Issuer  to enter  into the  Waiver
Agreement,  the Borrower  and the  Guarantors  hereby agree with the  Collateral
Agent, for the ratable benefit of the Lenders and the Issuer, as follows:

                                    ARTICLE I

                               SECURITY INTERESTS

     1.1 Grant of Security Interest.  (a) As collateral  security for the prompt
and complete  payment and performance  when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations,  each Grantor hereby grants to
the  Collateral  Agent for the  ratable  benefit  of the  Lenders  a  continuing
security interest in all of the right, title and interest of such Grantor in, to
and under (i) all  Trademarks  and Trademark  Licenses,  whether now existing or
hereafter from time to time acquired; and (ii) all Proceeds and Products thereof
(all of the above, collectively, the "Collateral").


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     (b) The  security  interest of the  Collateral  Agent  under this  Security
Agreement  extends to all  Collateral  of the kind which is the  subject of this
Security  Agreement  which  any  Grantor  may  acquire  at any time  during  the
continuation of this Security Agreement.

                                   ARTICLE II

                    SPECIAL PROVISIONS CONCERNING TRADEMARKS

     2.1 Rights of  Collateral  Agent and  Lenders;  Limitations  on  Collateral
Agent's and  Lenders'  Obligations.  (a) (a) Each Grantor  Remains  Liable under
Trademark Licenses.  Anything herein to the contrary notwithstanding and so long
as such  Grantor is the owner of such  Trademark  License,  each  Grantor  shall
remain  liable  under each of the  Trademark  Licenses to which it is a party to
observe and perform all the material  conditions and  obligations to be observed
and  performed  by it  thereunder,  all in  accordance  with  the  terms  of any
agreement  giving rise to each such  Trademark  License.  Neither the Collateral
Agent nor any Lender shall have any obligation or liability  under any Trademark
License by reason of or arising out of this Security Agreement or the receipt by
the  Collateral  Agent or any Lender of any payment  relating to such  Trademark
License  pursuant  hereto,  nor  shall  the  Collateral  Agent or any  Lender be
obligated in any manner to perform any of the  obligations of such Grantor under
or pursuant to any Trademark License,  to make any payment,  to make any inquiry
as to the nature or the  sufficiency of any payment  received by it or as to the
sufficiency  of any  performance  by any party under any Trademark  License,  to
present or file any claim,  to take any action to enforce any  performance or to
collect  the  payment of any  amounts  which may have been  assigned to it or to
which it may be entitled at any time or times.

     (b) Notice to  Contracting  Parties.  At any time after an Event of Default
has occurred and so long as such Event of Default shall be continuing,  upon the
request of the Collateral Agent each Grantor shall, and the Collateral Agent may
(with  concurrent  notice  to  such  Grantor  thereof),  notify  parties  to the
Trademark  Licenses to which it is a party that the Trademark Licenses have been
assigned to the Collateral Agent for the ratable benefit of the Lenders and that
payments in respect  thereof shall be made directly to the Collateral  Agent. At
any time after an Event of Default  shall have occurred and be  continuing,  the
Collateral  Agent may in its own name or in the name of others  communicate with
parties to the Trademark  Licenses to verify with them to its  satisfaction  the
existence, amount and terms thereof.

     2.2  Representations  and  Warranties.  Each Grantor hereby  represents and
warrants  that:  (a) Schedule I hereto sets forth all United  States  registered
Trademarks  owned by such Grantor in its own name as of the date hereof;  (b) to
the best  knowledge  of the  Grantors,  except as set forth on  Schedule I, each
United States  registered  Trademark  having  material  economic  value (each, a
"Material  Trademark" and  collectively,  the "Material  Trademarks")  is valid,
subsisting,  unexpired and enforceable  and has not been abandoned;  (c) to such
Grantor's knowledge,  no holding,  decision or judgment has been rendered by any
Governmental Authority with respect to any Material Trademark which would limit,
cancel or question the validity of any Material Trademark; and (d) except as set
forth on  Schedule  I, no  action  or  proceeding  is  pending  or,  to the best
knowledge of the Grantors,  threatened (x) seeking to limit,  cancel or question

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the validity of any Material  Trademark or the  applicable  Grantor's  ownership
thereof,  or (y) which, if adversely  determined,  would have a material adverse
effect on the value of any Material Trademark.

     2.3 Covenants.  Each Grantor covenants and agrees with the Collateral Agent
and the Lenders that,  from and after the date of this Security  Agreement until
the  Obligations  are paid in full, the Commitments are terminated and either no
Letters of Credit are outstanding or each outstanding  Letter of Credit has been
cash  collateralized or supported by a third-party  letter of credit as required
pursuant to the Waiver  Agreement:(a) (a) each Grantor (either itself or through
licensees)  will,  with respect to any Material  Trademark,  (i) continue to use
each Trademark as reflected in its current  catalogs,  brochures and price lists
in order to  maintain  such  Trademark  in full  force  free  from any  claim of
abandonment  for non-use,  (ii)  maintain as in the past the quality of products
and services  offered  under such  Trademark,  (iii) use  reasonable  efforts to
employ such  Trademark with the  appropriate  notice of  registration,  (iv) not
adopt or use any mark which is confusingly  similar or a colorable  imitation of
such  Trademark  unless within 45 days after such use or adoption the Collateral
Agent, for the ratable benefit of the Lenders, shall obtain a perfected security
interest in such mark pursuant to this Security Agreement,  and (v) not (and use
commercially  reasonable  efforts  to not  permit any  licensee  or  sublicensee
thereof to) do any act or knowingly omit to do any act whereby any Trademark may
become invalidated.

     (b) Each Grantor will notify the Collateral  Agent and the Lenders promptly
if it  knows,  or has  reason  to know,  that any  application  or  registration
relating to any Material Trademark may become abandoned or dedicated,  or of any
adverse  determination or material development  (including,  without limitation,
the institution of, or any such  determination or development in, any proceeding
in the United States Patent and Trademark Office or any court or tribunal in the
United States) regarding such Grantor's  ownership of any Material  Trademark or
its right to register the same or to keep and maintain the same.

     (c) Whenever any Grantor,  either by itself or through any agent, employee,
licensee or designee,  shall file for the registration of any Material Trademark
with the United States Patent and  Trademark  Office,  such Grantor shall report
such filing to the  Collateral  Agent and the Lenders  within five Business Days
after the last day of the  fiscal  quarter  in which such  filing  occurs.  Upon
request of the Collateral  Agent, such Grantor shall execute and deliver any and
all agreements,  instruments,  documents, and papers as the Collateral Agent may
reasonably  request to evidence the Collateral Agent's and the Lenders' security
interest in any Material  Trademark and the goodwill and general  intangibles of
such Grantor  relating thereto or represented  thereby,  and such Grantor hereby
appoints and constitutes the Collateral Agent its attorney-in-fact, in the event
such  Grantor  fails to timely do so, to execute and file all such  writings for
the  foregoing  purposes,  all acts of such attorney  being hereby  ratified and
confirmed. The foregoing power of attorney is coupled with an interest and shall
be  irrevocable  until the  Obligations  are paid in full, the  Commitments  are
terminated and no Letters of Credit are outstanding.

     (d) Each Grantor shall maintain each  registration of Material  Trademarks,
including, without limitation, filing of applications for renewal, affidavits of
use and affidavits of incontestability when appropriate.

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     (e) In the event that any Material  Trademark included in the Collateral is
infringed,  misappropriated  or  diluted  by a  third  party  in a  manner  that
materially adversely effects the economic value of such Material Trademark,  the
applicable  Grantor shall promptly  notify the Collateral  Agent and the Lenders
after it learns  thereof and shall  promptly  take such actions as it reasonably
deems appropriate  under the  circumstances to protect such Material  Trademark,
including,  where  appropriate,  to sue for  infringement,  misappropriation  or
dilution, to seek injunctive relief where appropriate and to recover any and all
damages for such infringement,  misappropriation or dilution,  except where such
action would be of negligible value, economic or otherwise.

     2.4 Collateral Agent's Appointment as Attorney-in-Fact. Each Grantor hereby
irrevocably  constitutes  and appoints the  Collateral  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,  from
time to time after the occurrence,  and during the continuation,  of an Event of
Default in the Collateral  Agent's  discretion,  for the purpose of carrying out
the terms of this Security 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 Security  Agreement,  and,  without
limiting  the  generality  of the  foregoing,  each  Grantor  hereby  gives  the
Collateral Agent the power and right, on behalf of such Grantor,  without notice
to or assent by such Grantor, to do the following:

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

     (b) to pay or discharge  taxes and Liens levied or placed on or  threatened
against the Collateral,  provided that if such taxes are being contested in good
faith and by appropriate proceedings,  the Collateral Agent and the Lenders will
consult with such Grantor before making any such payment; and

     (c) (i) to  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 Collateral Agent or as the Collateral  Agent shall direct;  (ii)
to ask or demand for,  collect,  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;  (iii) to 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 thereof and to enforce any other
right  in  respect  of any  Collateral;  (iv) to  defend  any  suit,  action  or
proceeding  brought against such Grantor with respect to any Collateral;  (v) to
settle,  compromise or adjust any suit, action or proceeding described in clause
(iv) above upon  reasonable  terms and, in  connection  therewith,  to give such
discharges or releases as the Collateral Agent may deem reasonably  appropriate;
(vi) to assign any  Trademark  (along with the goodwill of the business to which
any such Trademark pertains)throughout the world for such term or terms, on such
conditions,  and in such manner, as the Collateral Agent shall in its reasonable
discretion determine;  and (vii) generally,  to sell, transfer,  pledge and make
any agreement  with respect to or otherwise  deal with any of the  Collateral as
fully and  completely  as though the  Collateral  Agent were the absolute  owner
thereof for all purposes,  and to do, at the Collateral  Agent's option and such
Grantor's expense,  at any time, or from time to time, all acts and things which
the Collateral Agent reasonably deems necessary to protect,  preserve or realize
upon the Collateral  and the  Collateral  Agent's and the Lenders' Liens thereon

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and  to  effect  the  intent  of  this  Security  Agreement,  all as  fully  and
effectively as such Grantor might do.  Notwithstanding  anything to the contrary
contained herein, the Collateral Agent shall give such Grantor not less than ten
days prior  written  notice of the time and place of any sale or other  intended
disposition of any of the Collateral.

Each Grantor hereby  ratifies all that said attorneys shall lawfully do or cause
to be done by virtue  hereof.  This power of attorney is a power coupled with an
interest and shall be irrevocable.

     2.5  Remedies.  If an Event of Default shall occur and be  continuing,  the
Collateral Agent on behalf of the Lenders may exercise, in addition to all other
rights and remedies granted to them in this Security  Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured  party under the Code (whether or not in effect
in the  jurisdiction  where such rights are  exercised).  Without  limiting  the
generality of the foregoing, the Collateral Agent, without demand of performance
or other  demand,  presentment,  protest,  advertisement  or  notice of any kind
(except any notice  provided  herein or as may be  required  by law  referred to
below)  to or upon  any  Grantor  or any  other  Person  (all  and each of which
demands,  defenses,  advertisements and notices are hereby waived),  may in such
circumstances  forthwith  collect,  receive,  appropriate  and realize  upon the
Collateral,  or any part thereof,  and/or may forthwith  sell,  assign,  give an
option  or  options  to  purchase,  or  otherwise  dispose  of and  deliver  the
Collateral or any part thereof (or contract to do any of the foregoing),  in one
or more parcels at public or private sale or sales,  at any  exchange,  broker's
board or office of the  Collateral  Agent or any Lender or  elsewhere  upon such
terms and  conditions as it may deem advisable and at such prices as it may deem
best,  for cash or on credit or for future  delivery  without  assumption of any
credit risk.  The  Collateral  Agent or any Lender shall have the right upon any
such public sale or sales,  and, to the extent  permitted by law,  upon any such
private sale or sales,  to purchase the whole or any part of the  Collateral  so
sold, free of any right or equity of redemption in each Grantor,  which right or
equity is hereby waived and released.  The Collateral  Agent shall apply the net
proceeds of any such collection,  recovery, receipt, appropriation,  realization
or sale,  after  deducting  all  reasonable  costs and  expenses  of every  kind
incurred  therein  or  incidental  to  the  care  or  safekeeping  of any of the
Collateral  or in any  way  relating  to the  Collateral  or the  rights  of the
Collateral  Agent and the  Lenders  hereunder,  including,  without  limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the  Obligations,  in such order as the  Collateral  Agent may elect and only
after such  application  and after the  payment by the  Collateral  Agent of any
other amount required by any provision of law,  including,  without  limitation,
Section  9-504(1)(c)  of the Code,  need the  Collateral  Agent  account for the
surplus,  if any, to the Grantors.  To the extent  permitted by applicable  law,
each Grantor waives all claims,  damages and demands it may acquire  against the
Collateral Agent or any Lender arising out of the exercise by them of any rights
hereunder,  except to the extent  arising from the gross  negligence  or willful
misconduct of the Collateral  Agent or such Lender.  If any notice of a proposed

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sale or other  disposition  of Collateral  shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition. The Grantors shall remain liable for any deficiency if the
proceeds of any sale or other  disposition of the Collateral are insufficient to
pay the Obligations and the fees and disbursements of any attorneys  employed by
the Collateral Agent or any Lender to collect such deficiency.

                                   ARTICLE III

                                   DEFINITIONS

     Unless  otherwise  defined  herein or in the  preamble or recitals  hereto,
terms which are defined in the Credit  Agreement  and used herein are so used as
so defined and the following terms shall have the following meanings:

                           "Code" means the Uniform Commercial Code as from time
         to time in effect in the State of New York.

                           "Governmental   Authority"   means   any   nation  or
         government,  any  state or other  political  subdivision  thereof,  any
         agency,  authority,  instrumentality,  regulatory body, court,  central
         bank or  other  entity  exercising  executive,  legislative,  judicial,
         taxing,  regulatory  or  administrative  functions of or  pertaining to
         government,   any   securities   exchange   and   any   self-regulatory
         organization.

                           "Obligations"  means the unpaid  principal amount of,
         and interest on (including  interest accruing on or after the filing of
         any petition in  bankruptcy,  or the  commencement  of any  insolvency,
         reorganization or like proceeding, relating to the Grantors, whether or
         not a claim for such post-filing or post-petition interest is allowed),
         the Loans and all other  obligations and liabilities of the Grantors to
         the Agent,  the Collateral  Agent,  the Issuer or the Lenders,  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, the Credit  Agreement,  any Letter of Credit or LC
         Reimbursement  Obligations,  the  other  Loan  Documents  and any other
         document  executed and  delivered or given in  connection  therewith or
         herewith,  whether  on account of  principal,  interest,  reimbursement
         obligations,  fees,  indemnities,  costs, expenses (including,  without
         limitation,  all reasonable  fees and  disbursements  of counsel to the
         Agent,  the  Collateral  Agent,  the Issuer or to the Lenders  that are
         required to be paid by the Grantors pursuant to the terms of the Credit
         Agreement) or otherwise.

                           "Proceeds" means "proceeds",  as such term is defined
         in Section 9-306(1) of the Code and, to the extent not included in such
         definition, shall include, without limitation, (a) any and all proceeds
         of any  insurance,  indemnity,  warranty,  guaranty or letter of credit
         payable  to a  Grantor,  from time to time with  respect  to any of the
         Collateral,  (b) all payments (in any form  whatsoever) paid or payable
         to any Grantor from time to time in  connection  with any taking of all
         or any part of the  Collateral  by any  Governmental  Authority  or any
         Person acting under color of Governmental Authority,  (c) all judgments

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         in favor of any Grantor in respect of the  Collateral and (d) all other
         amounts  from time to time paid or payable or  received  or  receivable
         under or in connection with any of the Collateral.

                           "Products" are used herein as so defined in the Code.

                           "Trademark  License" means any agreement,  written or
         oral,  providing  for the grant by or to a Grantor  of any right to use
         any Trademark,  including,  without limitation, any thereof referred to
         in Schedule I hereto.

                           "Trademarks"  means (a) all trademarks,  trade names,
         corporate names,  company names,  business names,  fictitious  business
         names, trade styles,  service marks, logos and other source of business
         identifiers,  and the goodwill  associated  therewith,  now existing or
         hereafter  adopted  or  acquired,   all  registrations  and  recordings
         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 other country or
         any political  subdivision  thereof, or otherwise,  including,  without
         limitation,  any thereof referred to in Schedule I hereto,  and (b) all
         renewals thereof.

                                   ARTICLE IV

                                  MISCELLANEOUS

     4.1 Amendments,  etc. with Respect to the  Obligations.  Each Grantor shall
remain obligated hereunder,  and the Collateral shall remain subject to the Lien
granted hereby  notwithstanding  that, without any reservation of rights against
such  Grantor,  and without  notice to or further  assent by such  Grantor,  any
demand for payment of any of the Obligations  made by the Agent,  the Collateral
Agent,  the Issuer or any Lender may be rescinded by the Agent,  the  Collateral
Agent, the Issuer or any Lender, and any of the Obligations  continued,  and the
Obligations,  or the  liability  of the Grantors or 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 Agent, the Collateral  Agent, the Issuer or any
Lender,  and the Credit  Agreement,  the Notes, the other Loan Documents and any
other documents  executed and delivered in connection  therewith may be amended,
modified,  supplemented  or  terminated,  in whole or part,  as the  Agent,  the
Collateral Agent, the Issuer or any Lender may deem advisable from time to time,
and any guarantee, right of offset or other collateral security at any time held
by the Agent, the Collateral  Agent, the Issuer or any Lender for the payment of
the Obligations may be sold, exchanged, waived, surrendered or released. None of
the  Agent,  the  Collateral  Agent,  the  Issuer or any  Lender  shall have any
obligation to protect,  secure,  perfect or insure this or any other Lien at any
time held by it as security for the Obligations or any property subject thereto.
Each Grantor  waives any and all notice of the creation,  renewal,  extension or
accrual  of any of the  Obligations  and notice of or proof of  reliance  by the
Agent,  the  Collateral  Agent,  the  Issuer or any  Lender  upon this  Security
Agreement;  the Obligations,  and any of them,  shall  conclusively be deemed to

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have been  created,  contracted  or  incurred  in  reliance  upon this  Security
Agreement;  and all dealings  between the Grantors and the Agent, the Collateral
Agent, the Issuer or any Lender, shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Security  Agreement.  Each Grantor
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon such Grantor with respect to the Obligations.

     4.2 Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Collateral are irrevocable and powers coupled with
an interest.

     4.3  Severability.  Any  provision  of this  Security  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.

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

     4.5 No Waiver;  Cumulative  Remedies.  Neither  the Agent,  the  Collateral
Agent,  the  Issuer  nor any  Lender  shall  by any  act  (except  by a  written
instrument pursuant to Subsection 4.6 hereof),  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 or in any breach of any of the
terms  and  conditions  hereof.  No  failure  to  exercise,  nor  any  delay  in
exercising,  on the part of the Agent,  the Collateral  Agent, the Issuer or any
Lender,  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 Agent,  the Collateral
Agent,  the  Issuer or any  Lender of any right or remedy  hereunder  on any one
occasion shall not be construed as a bar to any right or remedy which the Agent,
the  Collateral  Agent,  the Issuer or such Lender 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 rights or remedies
provided by law.

     4.6 Integration; Waivers and Amendments;  Successors and Assigns; Governing
Law. This Security  Agreement  represents  the entire  agreement of the Grantors
with  respect  to the  subject  matter  hereof  and  there  are no  promises  or
representations  by the Agent,  the Collateral  Agent,  the Issuer or any Lender
relative to the subject matter hereof not reflected  herein or in the other Loan
Documents.  None of the terms or provisions  of this  Security  Agreement may be
waived,  amended,  supplemented  or  otherwise  modified  except  by  a  written
instrument  executed by each of the Grantors and the Collateral Agent,  provided
that any  provision of this Security  Agreement may be waived by the  Collateral
Agent in a written letter or agreement  executed by the  Collateral  Agent or by
telex  or  facsimile  transmission  from the  Collateral  Agent.  This  Security
Agreement  shall be binding upon the  successors and assigns of each Grantor and
shall inure to the benefit of the Agent,  the Collateral  Agent,  the Issuer and
the Lenders and their respective successors and assigns. THIS SECURITY AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.

                                       8

<PAGE>



     4.7 Notices.  All notices,  requests and demands to or upon the Grantors or
the Agent, the Collateral  Agent, the Issuer or any Lender to be effective shall
be in writing or by telecopy or telex and unless  otherwise  expressly  provided
herein,  shall be deemed to have been duly given or made when delivered by hand,
or, in the case of mail,  three days after deposit in the postal  system,  first
class postage prepaid, or, in the case of telecopy notice, when sent, or, in the
case of telex notice, when sent,  answerback  received,  addressed to a party at
the address provided for such party in the Credit Agreement.

     4.8 Counterparts. This Security Agreement may be executed by one or more of
the  parties  hereto on any  number  of  separate  counterparts  and all of said
counterparts  taken  together  shall be  deemed to  constitute  one and the same
instrument.

     4.9  Authority of  Collateral  Agent.  Each Grantor  acknowledges  that the
rights  and  responsibilities  of  the  Collateral  Agent  under  this  Security
Agreement  with  respect  to any  action  taken by the  Collateral  Agent or the
exercise or non-exercise by the Collateral Agent of any option,  right, request,
judgment or other right or remedy  provided  for herein or  resulting or arising
out of this Security  Agreement  shall, as between the Collateral  Agent and the
Lenders,  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
Collateral  Agent and the Grantors,  the Collateral  Agent shall be conclusively
presumed to be acting as agent for the Lenders with full and valid  authority so
to act or  refrain  from  acting,  and  the  Grantors  shall  not be  under  any
obligation, or entitlement, to make any inquiry respecting such authority.

     4.10 Releases.  The Agent, the Collateral Agent, the Issuer and the Lenders
agree to cooperate  with each Grantor and its  Subsidiaries  with respect to any
sale permitted by subsection 5.07 of the Credit Agreement and promptly take such
action and execute and deliver  such  instruments  and  documents  necessary  to
release the Liens and security  interests  created hereby relating to any of the
assets or property  affected by any sale  permitted  by  subsection  5.07 of the
Credit Agreement including, without limitation, any necessary Uniform Commercial
Code amendment, termination or partial termination statement.

     4.11 Termination.  This Security  Agreement (other than with respect to any
cash collateral  securing any outstanding Letter of Credit) shall terminate when
all the  Obligations  have been paid in full, the Commitments are terminated and
either no Letters of Credit are outstanding or each outstanding Letter of Credit
has been cash  collateralized or is supported by a third-party  letter of credit
as  required  pursuant  to the  Waiver  Agreement.  Upon such  termination,  the
Collateral  Agent shall  reassign and redeliver  (or cause to be reassigned  and
redelivered)  to the  applicable  Grantor,  or to such  person or persons as the
Grantors  shall  designate,  or to whomever may be lawfully  entitled to receive
such surplus,  against receipt,  such of the Collateral (if any) (other than any
cash  collateral  securing any  outstanding  Letter of Credit) as shall not have
been sold or otherwise  applied by the  Collateral  Agent  pursuant to the terms
hereof  and  shall  still be held by it  hereunder,  together  with  appropriate
instruments or reassignment and release. Any such reassignment and release shall
be without  recourse  upon or warranty  by the  Collateral  Agent  (other than a
warranty  that the  Collateral  Agent has not assigned its rights and  interests
hereunder to any Person) and at the expense of the Grantors.

                                        9

<PAGE>

     IN WITNESS WHEREOF,  the parties hereto have caused this Security Agreement
to be duly executed by their  respective  authorized  officers as of the day and
year first above written

                           MARVEL ENTERPRISES, INC.,
                           as Borrower

                           By:  /S/
                                --------------------------
                                Name:     Allen S. Lipson
                                Title:    Executive Vice President, Business &
                                                  Legal Affairs

                           MARVEL ENTERTAINMENT GROUP, INC.,
                           as Guarantor

                           By:     /S/
                                 --------------------------
                                 Name:     Allen S. Lipson
                                 Title:    Vice President

                           MEI HOLDING COMPANY S CORP.,
                           as Guarantor

                           By:    /S/
                                 ---------------------------
                                 Name:     Allen S. Lipson
                                 Title:    Vice President

                           MEI HOLDING COMPANY F CORP.,
                           as Guarantor

                           By:   /S/
                                ------------------------------
                                Name:     Allen S. Lipson
                                Title:    Vice President

                           MARVEL CHARACTERS, INC.,
                           as Guarantor

                           By:   /s/
                                ---------------------------------
                                Name:     Allen S. Lipson
                                Title:    Vice President

                           MARVEL RESTAURANT VENTURE CORP.,
                           as Guarantor

                           By:   /s/
                                 --------------------------------
                                 Name:     Allen S. Lipson
                                 Title:    Vice President

                             MRV, INC., as Guarantor

                           By:   /s/
                                ---------------------------
                                Name:     Allen S. Lipson
                                Title:    Vice President

                           CITIBANK, N.A., as Collateral Agent

                           By:   /s/
                                -------------------------------
                                Name: Miles D. McManus
                                      Title: Vice President


                                     10


<PAGE>

                                 ACKNOWLEDGMENT

STATE OF NEW YORK                  )
                                   ) SS
COUNTY OF NEW YORK                 )


     The foregoing  agreement was executed and acknowledged  before me this 14th
day of May by Allen S.  Lipson,  personally  known  to me to be  Executive  Vice
President,  Business & Legal  Affairs of Marvel  Enterprises,  Inc.,  personally
known to me to be Vice  President  of  Marvel  Entertainment  Group,  Inc.;  MEI
Holding Company S Corp.; MEI Holding Company F Corp.;  Marvel Characters,  Inc.;
Marvel  Restaurant  Venture Corp.; and MRV, Inc., in each case on behalf of such
corporation.


                                                                   Notary Public

                                                        My commission expires:

                                       11


                 SCHEDULE I TO THE TRADEMARK SECURITY AGREEMENT

Schedule 1 shall be furnished supplementary to the Commission upon request.