Exhibit 10.4


 


Execution Version


 


SECOND LIEN
GUARANTEE AND COLLATERAL AGREEMENT, dated as of April 30, 2010 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 GOLDMAN
SACHS LENDING PARTNERS LLC, as Administrative Agent (in such capacity, the “Administrative
Agent”) for the banks and other financial institutions or entities (the “Lenders”)
from time to time parties to the Second Lien Credit Agreement, dated as of April 30,
2010 (as amended, supplemented, restated or otherwise modified from time to
time, the “Credit Agreement”), among SIX FLAGS ENTERTAINMENT CORPORATION
(formerly known as SIX FLAGS, INC.), 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.


 


W  I  T
N  E  S  S  E  T  H:


 


WHEREAS, in
connection with the confirmation and implementation of the Plan of
Reorganization, the Borrower has requested that the Lenders make a loan of
$250,000,000 to the Borrower under the Credit Agreement in order to enable the
reorganized Debtors to consummate the transactions contemplated by the Plan of
Reorganization, pay related fees and expenses and finance the working capital
needs and general corporate purposes of 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; and


 


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, 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: 
Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Documents, Equipment, General Intangibles, Instruments, Inventory,
Letter-of-Credit Rights and Supporting Obligations; provided that none
of the foregoing UCC terms shall be deemed to include Excluded Assets.


 


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


 

















 


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


 


“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 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 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 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 pursuant
hereto) or otherwise.


 


“Collateral”:  as defined in Section 3(a).


 


“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 or oral
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.


 


“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 depositary institution.


 


“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
and (B) HWP Development Holdings, LLC, HWP Development LLC and any other
entity formed pursuant to the Great Escape Agreements and (C) Servicios de
Restaurantes Especializados, S.A. De C.V., (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 Acquisition, and (B) the Amended and
Restated License Agreement #5854-WB/DC dated as of April 1, 1998 with the
Borrower and the License 


 


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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 is ineffective under applicable law, (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, (iv) that
portion of the Capital Stock of any Excluded Foreign Subsidiary that is in
excess of 65% of the total outstanding Capital Stock of such Excluded Foreign
Subsidiary, (v) the Capital Stock of a Subsidiary acquired after the date
hereof to the extent that Section 6.6(f) of the Credit Agreement does
not require the granting of a security interest therein, (vi) any Property of any Grantor covered by a pledge or
security interest under the New Time Warner Facility or subject to a negative  pledge thereunder, (vii) any Property owned by any Grantor to the extent that
creation of a security interest therein would be prohibited by a Contractual
Obligation binding on any Grantor that is the owner of such Property, including
pursuant to the New Time Warner Facility or the Partnership Parks Agreements
(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 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, (viii) any Property of any Grantor to the extent that the
Administrative Agent shall determine in its sole discretion 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 and (ix) United States intent-to-use
Trademark applications 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.


 


“First
Lien Guarantee and Collateral Agreement”: the First Lien Guarantee and
Collateral Agreement, dated as of the date hereof, made by Parent, Holdings,
the Borrower and each Subsidiary Guarantor, in favor of the First Lien Administrative
Agent for the benefit of the secured parties thereunder.


 


“Foreign
Subsidiary”:  any Subsidiary
organized under the laws of any jurisdiction outside the United States of
America.


 


“Foreign
Subsidiary Voting Stock”:  the voting
Capital Stock of any Foreign Subsidiary.


 


“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 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 and disbursements of counsel to the Administrative Agent or to the Secured
Parties that are required to be paid by such Guarantor pursuant to the terms of
this Agreement or any other Loan Document to which such Guarantor is a party).


 


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


 


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“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 Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks, and the Trademark
Licenses, and all rights to sue at law or in equity for any Infringement
thereof, including the right to receive all proceeds and damages therefrom; provided
that Intellectual Property excludes any Excluded Assets.


 


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


 


“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 Foreign Subsidiary Voting 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 excludes any Excluded
Assets.


 


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


 


“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.


 


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


 


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“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 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 Lenders and the Agents.


 


“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, domain names, 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, or otherwise, 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 or oral
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.


 


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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.


 


(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 when due (whether at the
stated maturity, by acceleration or otherwise) of the Borrower 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 and the Commitments shall be
terminated.


 


(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 and the Commitments are terminated.


 


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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 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 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, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) 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.


 


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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, 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 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 


 


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available
funds in the currency in which the relevant Obligation is denominated, at the
applicable Payment Office.


 


SECTION 3.  GRANT OF SECURITY INTEREST


 


(a)           Each Grantor hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a
security interest (the priority of which shall be as set forth in the
Intercreditor Agreement) 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:


 


(i)            all Accounts;


 


(ii)           all Chattel Paper;


 


(iii)          all
Deposit Accounts;


 


(iv)          all Documents;


 


(v)           all Equipment;


 


(vi)          all Fixtures;


 


(vii)         all
General Intangibles;


 


(viii)        all
Instruments;


 


(ix)           all Intellectual Property;


 


(x)            all Inventory;


 


(xi)           all Investment Property;


 


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


 


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


 


(xiv)        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 the Excluded Assets and (ii) the Partnership Parks
Entities and their Property and any other Property of Parent and its
Subsidiaries subject to the Partnership Parks Agreements 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
Park Entities or, with respect to any other Property of Parent and its
Subsidiaries, is prohibited by the Partnership Parks Agreements.


 


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(b)           Notwithstanding anything herein to the
contrary, it is the understanding of the parties hereto that the Liens granted
pursuant to Section 3(a) herein shall, prior to the First Priority
Obligations Payment Date (under and as defined in the Intercreditor Agreement),
be subject and subordinate to the Liens granted to the First Lien
Administrative Agent, for the ratable benefit of the Secured Parties (under and
as defined in the First Lien Credit Documents), to secure the First Priority
Obligations (under and as defined in the Intercreditor Agreement).  All other rights and remedies of the
Administrative Agent and the other Secured Parties are further subject to the
provisions of the Intercreditor Agreement.


 


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, 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, a
partnership or a limited liability company) have been duly and validly issued
and 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 the First Lien
Guarantee and Collateral Agreement and this Agreement.


 


4.2           Intellectual Property.  (a) Schedule 5 lists all (i) Registered
Intellectual Property owned by such Grantor in its own name 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.


 


(b)           Except as set forth in Schedule 5 and
except for joint marketing and sponsorship agreements entered into by such
Grantor in the ordinary course of its business, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.


 


10
















 


(c)           Such Grantor owns, 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, and
takes reasonable actions to protect, preserve and maintain such Intellectual
Property except as permitted by Sections 7.5(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 permitted by Sections 7.5(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 material
Intellectual Property in any material respect, 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)           Commercial Tort Claims.  On the date hereof, no Grantor has rights in
any Commercial Tort Claim with potential value in excess of $100,000.


 


4.3           Additional Representations and
Warranties.


 


(a)           On
the date of this Agreement, such Grantor’s 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 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
power 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 any consent or approval that has
been obtained and is in full force and 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 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 


 


11

















 


jurisdiction, except as provided under applicable law
with respect to the filing of continuation statements.


 


(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 4.4(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, subject
to the terms of the Intercreditor Agreement, 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 New York UCC 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.


 


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 (other than contingent indemnification obligations not
yet accrued and payable), and the Commitments shall have terminated:


 


5.1           Delivery of Pledged Securities.


 


(a)           Subject
to Section 5.1(f), each Grantor agrees promptly to deliver or cause to be
delivered to the First Lien Administrative Agent or the Administrative Agent for
the benefit of the Secured Parties, as applicable, in accordance with the terms
of the Intercreditor Agreement, 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 (it being
understood that with respect to Reino Aventura, S.A. De C.V. and Ventas Y
Servicios Al Consumidor, S.A. De C.V., such Pledged Securities shall be
delivered within 30 days following the Closing Date (or such later date as
consented to by the Administrative Agent in its reasonable discretion)).


 


(b)           Each
Grantor will cause (i) any Indebtedness for borrowed money (other than
intercompany loans referred to in clause (ii) below) having an aggregate
principal amount in excess of $1,000,000 owed to such Grantor by any Person and
(ii) any intercompany loans made by such Grantor to any Person that is not
a Loan Party to be evidenced by a duly executed promissory note (or pursuant to
a global note) that is pledged and delivered to the First Lien Administrative
Agent or the Administrative Agent, for the benefit of the Secured Parties, as 


 


12

















 


applicable, in accordance with the terms of the
Intercreditor Agreement, pursuant to the terms hereof.


 


(c)           Upon
delivery to the First Lien Administrative Agent or the Administrative Agent, as
applicable, in accordance with the terms of the Intercreditor Agreement, (i) any
Pledged Securities shall be accompanied by stock powers duly executed in blank
or other instruments of transfer reasonably satisfactory to the First Lien
Administrative Agent or the Administrative Agent, as applicable, in accordance
with the terms of the Intercreditor Agreement, and by such other instruments
and documents as the First Lien Administrative Agent or the Administrative
Agent, as applicable, in accordance with the terms of the Intercreditor
Agreement, 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 First Lien Administrative Agent or the Administrative
Agent, as applicable, in accordance with the terms of the Intercreditor
Agreement, 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)           Subject
to the terms of the Intercreditor Agreement, 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, (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, Letter-of-Credit Rights and any other relevant Collateral,
taking any actions necessary to enable the Administrative Agent to obtain “control”
(within the meaning of the applicable Uniform Commercial Code) with respect
thereto.


 


(e)           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 5.4(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.


 


(f)            Notwithstanding any
of the foregoing or any other provisions of this Agreement, the parties hereto
acknowledge and agree that the First Lien Administrative Agent, for the ratable
benefit of the Secured Parties (under and as defined in the First Lien Credit
Documents), has a prior security interest in the Collateral and that
certificates, instruments and documents representing or evidencing the
Collateral are required to be delivered to and held by the First Lien
Administrative Agent under the applicable First Lien Credit Documents, subject
to Section 2.3(c) of the Intercreditor Agreement, and such delivery
to the First Lien Administrative Agent under the applicable First Lien Credit
Documents shall be deemed to satisfy any requirement for such delivery to the
Administrative Agent under this Agreement until the First


 


13

















 


Priority Obligations Payment Date (as defined in the Intercreditor
Agreement) shall have occurred.


 


5.2           Intellectual Property.  (a) Except as permitted by Sections 7.5(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 7.5(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.


 


(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 6.1(f) of the
Credit Agreement if it knows, or has reason to know, that any material
Registered Intellectual Property 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 material Intellectual Property,
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 


 


14

















 


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 filing to the
Administrative Agent on the first Compliance Certificate delivered pursuant to Section 6.1(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)           Such
Grantor will take such actions as it reasonably deems appropriate under the
circumstances, 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 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 such Intellectual Property is of
material economic value to the Grantors as a whole, 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.


 


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, or (iii) in the jurisdiction of organization of any
Grantor, within 15 days of any such change.


 


(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)           Subject
to the terms of the Intercreditor Agreement, 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, 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 $1,000,000 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.


 


15

















 


(d)           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 not permitted under the Credit
Agreement, 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 $1,000,000, 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 any 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 or willful misconduct of the Administrative Agent or
any Secured Party or of any director, officer, or employee of the
Administrative Agent or any Secured Party.


 


(g)           If
any Grantor shall at any time hold or acquire a Commercial Tort Claim with a
value in excess of $1,000,000, 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)           The
aggregate book value of all Vehicles owned by all such Grantors will not exceed
$10,000,000 or such higher book value as shall be reasonably satisfactory to
the Administrative Agent.


 


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 


 


16

















 


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 constituting Collateral and evidencing an amount in excess of
$1,000,000, such Grantor shall forthwith endorse, assign and deliver the same
to the First Lien Administrative Agent or the Administrative Agent for the
benefit of the Secured Parties, as applicable, in accordance with the terms of
the Intercreditor Agreement, accompanied by such instruments of transfer or
assignment duly executed in blank as the First Lien Administrative Agent or the
Administrative Agent, as applicable, in accordance with the terms of the
Intercreditor Agreement, 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
forthwith endorse, assign and deliver the same to the First Lien Administrative
Agent or the Administrative Agent for the benefit of the Secured Parties, as
applicable, in accordance with the terms of the Intercreditor Agreement,
accompanied by such instruments of transfer or assignment duly executed in
blank as the First Lien Administrative Agent or the Administrative Agent, as
applicable, in accordance with the terms of the Intercreditor Agreement, may
from time to time reasonably request.  If
any Capital Stock 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, at the
Administrative Agent’s reasonable request and option pursuant to an agreement
in form and substance reasonably satisfactory to the Administrative Agent,
subject to the terms of the Intercreditor Agreement, 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.  If any Capital Stock,
whether certificated or uncertificated, or other Investment Property are held
by any Grantor or its nominee through a securities intermediary or commodity
intermediary, such Grantor shall promptly notify the Administrative Agent
thereof and at the Administrative Agent’s request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the Administrative
Agent shall, subject to the terms of the Intercreditor Agreement, either (i) cause
such securities intermediary or (as the case may be) commodity intermediary to
agree to comply with entitlement orders or other instructions from the
Administrative Agent to such securities intermediary as to such security
entitlements, or (as the case may be) to apply any value distributed on account
of any commodity contract as directed by the Administrative Agent to such
commodity intermediary, in each case without further consent of any Grantor or
such nominee, or (ii) in the case of financial assets or other Investment
Property held through a securities intermediary, arrange for the Administrative
Agent to become the entitlement holder with respect to such Investment
Property, with the Grantor being permitted, only with the consent of the
Administrative Agent to exercise rights to withdraw or otherwise deal with such
Investment Property.  The Administrative
Agent agrees with each of the Grantors that the Administrative Agent shall not
give any such entitlement orders or instructions or directions to any such
Issuer, 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.  The provisions of this paragraph shall not
apply to any financial assets credited to a securities account for which the
Administrative Agent is the securities intermediary.


 


17

















 


SECTION 6.  REMEDIAL PROVISIONS


 


6.1           Registration in Nominee Name;
Denominations. If an Event of Default shall occur and be continuing,
subject to the terms of the Intercreditor Agreement (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 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,
subject to the terms of the Intercreditor Agreement, the Administrative Agent
shall have notified the Borrower 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 consistent
with the terms of this Agreement, the Credit Agreement and the other Loan
Documents; provided that
such rights and powers shall not be exercised in any manner that could
materially and adversely affect the rights inuring to a holder of any Pledged
Securities or the rights and remedies of any of the Administrative Agent or the
other Secured Parties under this Agreement, the Credit Agreement or any other
Loan Document or the ability of the Secured Parties to exercise the same.


 


(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, 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 First Lien Administrative Agent or the
Administrative Agent, as applicable, in accordance with the terms of the
Intercreditor Agreement, in the same form as so received (with any necessary
endorsement reasonably requested by the First Lien Administrative Agent or the
Administrative Agent, as applicable, in accordance with the terms of the
Intercreditor Agreement).


 


(b)           Subject
in each case to the terms of the Intercreditor Agreement, 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 


 


18

















 


(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 First Lien Administrative Agent or the Administrative Agent, as
applicable, in accordance with the terms of the Intercreditor Agreement, 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 First Lien
Administrative Agent or the Administrative Agent, as applicable, in accordance
with the terms of the Intercreditor Agreement, (ii) segregated from other
property or funds of such Grantor and (iii) forthwith delivered to the
First Lien Administrative Agent or the Administrative Agent, as applicable, in
accordance with the terms of the Intercreditor Agreement, in the same form as
so received (with any necessary endorsement reasonably requested by the First
Lien Administrative Agent or the Administrative Agent, as applicable, in
accordance with the terms of the Intercreditor Agreement).  Any and all money and other property paid
over to or received by the First Lien Administrative Agent or the
Administrative Agent, as applicable, in accordance with the terms of the
Intercreditor Agreement, pursuant to the provisions of this paragraph (b) shall
be retained by the First Lien Administrative Agent or the Administrative Agent,
as applicable, in accordance with the terms of the Intercreditor Agreement, in
an account to be established by the First Lien Administrative Agent or the
Administrative Agent, as applicable, in accordance with the terms of the
Intercreditor Agreement, 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 First Lien Administrative Agent or the Administrative Agent, as
applicable, in accordance with the terms of the Intercreditor Agreement, 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.


 


(c)           Subject
to the terms of the Intercreditor Agreement, 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, subject to the terms of the Intercreditor
Agreement, 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 


 


19

















 


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.


 


6.3           Additional Remedies upon Default.


 


(a)           Subject
to the terms of the Intercreditor Agreement, 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) 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 (iv) 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 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 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 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 10 days’ written notice
(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 


 


20

















 


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 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.  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.  Subject to the terms of the Intercreditor
Agreement, at such intervals as may be agreed upon by the Borrower and the
Administrative Agent, or, if an Event of Default shall have occurred and be
continuing, 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, pro rata
among the Secured Parties according to the amounts of the Obligations then due
and owing and remaining unpaid to the Secured Parties;


 


21
















 


Third,
to the Administrative Agent, for application by it towards prepayment of the
Obligations, pro rata among the Lenders according to the amounts of the
Obligations then held by the Lenders, with any such 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 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.  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 indefeasible
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, subject to the terms of the Intercreditor
Agreement (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 


 


22

















 


such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made 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) subject to the terms of the Intercreditor Agreement,
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.


 


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 


 


23

















 


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 (subject
to the terms of the Intercreditor Agreement):


 


(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;


 


(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.


 


24

















 


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)           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 highest rate per annum at which interest would
then be payable on any category of past due 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.


 


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.  Neither the Administrative
Agent, any Secured Party nor any of their respective officers, directors,
employees or agents shall 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 such failure constitutes
gross negligence, willful misconduct or fraud. 
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 gross negligence or willful misconduct.


 


7.3           Execution
of 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 personal property” in any such
financing statements.  Each Grantor
hereby ratifies and authorizes the


 


25

















 


filing by the Administrative
Agent of any financing statement with respect to the Collateral made prior to
the date hereof.


 


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.


 


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 6.6 and 10.1 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 10.2 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 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 10.5 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.


 


26

















 


(b)           Each
Guarantor agrees to pay, and to save the Administrative Agent and the Secured
Parties 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.


 


(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 10.5 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 the terms of the Intercreditor
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, 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), 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


 


27

















 


such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.


 


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.  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.  With respect to the pledge of any Foreign
Subsidiary Voting Stock, in the event of any conflict between the terms of this
Agreement and the provisions of any pledge agreement covering such Foreign
Subsidiary Voting Stock, the provisions of such pledge 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         Submission To Jurisdiction; Waivers.  Each of the Agents, the Secured Parties and each
Grantor hereby irrevocably and unconditionally:


 


(a)           submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;


 


(b)           consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;


 


(c)           agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such Grantor at its address referred
to in Section 8.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;


 


(d)           agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and


 


(e)           waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.


 


8.13         Acknowledgments.  Each Grantor hereby acknowledges that:


 


28

















 


(a)           it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;


 


(b)           neither
the Administrative Agent nor any Secured Party has any fiduciary relationship
with or duty to any Grantor arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Grantors,
on the one hand, and the Administrative Agent and Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and
creditor; and


 


(c)           no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Secured
Parties or among the Grantors and the Secured Parties.


 


8.14         Additional Grantors.  Each Subsidiary of Parent that is required to
become a party to this Agreement pursuant to Section 6.6 of the Credit
Agreement shall become 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 1 hereto.


 


8.15         Termination, Releases or
Subordination.


 


(a)           This
Agreement, the security interest granted to the Administrative Agent and all
other security interests granted hereby shall terminate with respect to all
Obligations when all the outstanding Obligations (other than contingent
indemnification obligations not yet accrued and payable) have been indefeasibly
paid in full and the Lenders have no further commitment to lend under the
Credit Agreement.


 


(b)           A
Grantor shall automatically be released from its obligations hereunder, and the
security interest granted to the Administrative Agent in the Collateral of such
Grantor shall be automatically released, upon the consummation of any
transaction permitted by the Credit Agreement as a result of which such Grantor
ceases to be a Subsidiary; provided that the Required Lenders (or all
Lenders, as the case may be) shall have consented to such transaction (to the
extent required by the Credit Agreement) and the terms of such consent did not
provide otherwise.


 


(c)           Upon
any Disposition by any Grantor of any Collateral that is permitted under the
Credit Agreement, or upon the effectiveness of any written consent of the
Required Lenders (or all Lenders, as the case may be) to the release of the
security interest granted hereby in any Collateral, the security interest of
such Grantor in such Collateral shall be automatically released or, to the
extent permitted under Section 10.16(a) of the Credit Agreement,
subordinated.


 


(d)           In
connection with any termination, release or subordination pursuant to paragraph
(a), (b) or (c) of this Section 8.15, the Administrative Agent
shall execute and deliver to any Grantor, at such Grantor’s expense, all
documents that such Grantor shall reasonably request to evidence such
termination, release or subordination, as applicable.  Any execution and delivery of documents
pursuant to this Section 8.15 shall be without recourse to or warranty by
the Administrative Agent.


 


8.16         WAIVER OF JURY TRIAL.  EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY


 


29

















 


LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


8.17         INTERCREDITOR AGREEMENT.  NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED PURSUANT TO THIS
AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY HEREUNDER ARE SUBJECT TO THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT. 
IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT
AND THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND
CONTROL.


 


30

















 


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


 


	
   

  	
  SIX FLAGS ENTERTAINMENT

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ James M. Coughlin

  
	
   

  	
  Name:

  	
  James M. Coughlin

  
	
   

  	
  Title:

  	
  General Counsel

  
				



 


 


	
   

  	
  SIX FLAGS OPERATIONS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ James M. Coughlin

  
	
   

  	
  Name:

  	
  James M. Coughlin

  
	
   

  	
  Title:

  	
  General Counsel

  
				



 


 


	
   

  	
  SIX FLAGS THEME PARKS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ James M. Coughlin

  
	
   

  	
  Name:

  	
  James M. Coughlin

  
	
   

  	
  Title:

  	
  General Counsel

  
				



 

















 


	
   

  	
  FIESTA TEXAS, INC.

  
	
   

  	
  FUNTIME, INC.

  
	
   

  	
  FUNTIME PARKS, INC.

  
	
   

  	
  GREAT AMERICA LLC

  
	
   

  	
  GREAT ESCAPE HOLDING INC.

  
	
   

  	
  HURRICANE HARBOR GP LLC

  
	
   

  	
  HURRICANE HARBOR LP LLC

  
	
   

  	
  KKI, 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

  
	
   

  	
  SFJ MANAGEMENT INC.

  
	
   

  	
  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/ Danielle J. Bernthal

  
	
   

  	
  Name:

  	
  Danielle J. Bernthal

  
	
   

  	
  Title:

  	
  Assistant Vice President

  
				



 


2

















 


	
   

  	
  HURRICANE HARBOR LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  HURRICANE HARBOR GP LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Danielle J. Bernthal

  
	
   

  	
   

  	
  Name:

  	
  Danielle J.
  Bernthal

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Vice President

  
					



 


 


	
   

  	
  SIX FLAGS AMERICA LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  FUNTIME, INC.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Danielle J. Bernthal

  
	
   

  	
   

  	
  Name:

  	
  Danielle J.
  Bernthal

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Vice President

  
					



 


 


	
   

  	
  SIX FLAGS GREAT ESCAPE L.P.

  
	
   

  	
  GREAT ESCAPE THEME PARK L.P.

  
	
   

  	
  GREAT ESCAPE RIDES L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GREAT ESCAPE HOLDING INC.,

  
	
   

  	
   

  	
  their General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Danielle J. Bernthal

  
	
   

  	
   

  	
  Name:

  	
  Danielle J.
  Bernthal

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Vice President

  
					



 


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