Document:

Exhibit 10.1      Execution Copy

                                WAIVER AGREEMENT

     This WAIVER AGREEMENT,  dated as of May 14, 2001 (the "Waiver  Agreement"),
among MARVEL  ENTERPRISES,  INC. (the "Borrower"),  the GUARANTORS party hereto,
the LENDERS party hereto and  CITIBANK,  N.A.,  as Agent,  Collateral  Agent and
Issuer.

                             PRELIMINARY STATEMENTS:

         (1)  The  Borrower,  the  Guarantors,   the  Lenders,  the  Agent,  the
Collateral Agent and the Issuer have entered into a Credit Agreement dated as of
April 1, 1999 and amended  pursuant to the First Amendment dated as of March 21,
2000,  the  Second  Amendment  dated as of June 1, 2000 and the Third  Amendment
dated as of August 9, 2000 (the "Credit Agreement").

         (2)  Pursuant  to the Credit  Agreement,  the Issuer has issued for the
account  of  the  Borrower   certain  Letters  of  Credit  which  are  currently
outstanding  in the  aggregate  face  amount of  $17,547,333.53,  as more  fully
described on Schedule 1 hereto (the "Outstanding LC's").

         (3) Certain  Events of Default have occurred and are  continuing  under
the  Credit  Agreement  and the  Borrower  has  requested  that the  Agent,  the
Collateral  Agent, the Issuer and the Lenders waive such Events of Default.  The
Agent,  the  Collateral  Agent,  the Issuer and the Lenders are willing to waive
such Events of Default, but only on the terms and conditions set forth herein.

         NOW,  THEREFORE,  in consideration of the premises,  the parties hereto
agree as follows:

     SECTION 1. Definitions.  Unless otherwise defined herein, the terms defined
in the Credit  Agreement are used herein as therein  defined,  and the following
terms shall have the following meanings:

               "Copyright  Security  Agreement"  means  the  Copyright  Security
          Agreement,   dated  as  of  May  14,  2001  among  the  Borrower,  the
          Guarantors,  and the  Collateral  Agent  substantially  in the form of
          Exhibit A hereto, as amended from time to time.

               "Effective  Date"  means the first  date on which the  conditions
         precedent  specified  in  Section 5 shall  have been  satisfied  or the
         satisfaction  thereof  shall have been  waived in  accordance  with the
         terms hereof.

               "IP  Collateral"  means,  collectively,  all of the Collateral as
          defined in each of the Copyright  Security Agreement and the Trademark
          Security Agreement.

               "IP Security  Documents" means the Copyright  Security  Agreement
          and the Trademark Security Agreement and any instruments of assignment
          or other instruments or agreements executed pursuant to the foregoing.

<PAGE>

               "Specified  Events of  Default"  means (a) each  Event of Default
          which has occurred or which may occur under Section 5.13, 5.14 or 5.15
          of the Credit  Agreement and (b) the  Borrower's  and the  Guarantors'
          failure to comply with Section 9(B) of the Security  Agreement,  which
          requires  that all  proceeds of any  Collateral  (including  all cash,
          checks,  drafts,  money  orders  and  other  payments  in  respect  of
          Accounts)  shall,  within  one  (1)  Business  Day of  receipt  by the
          Borrower or a Guarantor, be deposited into a Blocked Account.

               "Termination  Date" means the date of  occurrence  of an event of
          termination as provided in Section 3.

               "Trademark  Security  Agreement"  means  the  Trademark  Security
          Agreement,   dated  as  of  May  14,  2001  among  the  Borrower,  the
          Guarantors,  and the  Agent  substantially  in the form of  Exhibit  B
          hereto as amended from time to time.

     SECTION 2. Waiver.  Subject to the terms and conditions  hereof, the Agent,
the  Collateral  Agent,  the Issuer and the  Lenders  hereby  agree to waive the
Specified  Events of Default,  whether now  existing or occurring in the future;
provided,  however,  that the  foregoing  waiver will be of no further  force or
effect,  and the Agent, the Collateral Agent, the Issuer and the Lenders will be
entitled  to  exercise  all of  their  rights  and  remedies  under  the  Credit
Agreement,  the other Loan Documents and applicable  law, upon the occurrence of
the Termination  Date. The foregoing waiver is not and shall not be construed as
an amendment, waiver or modification of the Credit Agreement except as expressly
provided herein.

     SECTION  3.  Events  of  Termination.  Upon  the  occurrence  of any of the
following events:

          (a) the Borrower or any Guarantor  shall default in the  observance or
     performance  of  any  agreement  or  covenant   contained  in  this  Waiver
     Agreement; or

          (b) the  occurrence  of a Default or Event of Default  (other than the
     Specified Events of Default);

then, and in any such event, the waiver provided in Section 2 shall  immediately
and automatically terminate and have no force or effect.

     SECTION     4.      Representations,      Warranties     and     Covenants.

          (a) Each of the Borrower and the  Guarantors  represents  and warrants
     that the  execution  and delivery by each of them of this Waiver  Agreement
     and each IP Security  Document and the  performance by each such Obligor of
     its  obligations  hereunder and thereunder have been duly authorized by all
     necessary  corporate,  partnership or limited  liability company action, as
     applicable,  require no action by or in  respect  of, or filing  with,  any
     governmental body, agency or official (except for any such action or filing
     that has been taken and is in full force and effect) and do not contravene,
     or  constitute  a  default  under,  any  provision  of  applicable  law  or
     regulation or of the certificate or articles of  incorporation,  by-laws or
     other constitutional document of such Obligor or of any material agreement,
     judgment,  injunction,  order,  decree or other material instrument binding
     upon such  Obligor or result in the creation or  imposition  of any Lien on
     any property or assets of such Obligor other than Liens created pursuant to
     the Collateral Documents and the IP Security Documents.

                                        2

<PAGE>

          (b) Each of the Borrower and the  Guarantors  represents  and warrants
     that this Waiver  Agreement  and each IP Security  Document  have each been
     duly  executed and  delivered by such Obligor and  constitutes  a valid and
     binding  agreement of such Obligor,  in each case enforceable in accordance
     with its terms.

          (c) Each of the Borrower and the  Guarantors  represents  and warrants
     that (i) except for the Specified Events of Default, no Default or Event of
     Default has occurred and is continuing  under any of the Loan Documents and
     (ii) all  representations and warranties of the Borrower and the Guarantors
     contained  in the  Loan  Documents  are true and  correct  in all  material
     respects  with the  same  effect  as if made on and as of the date  hereof,
     except that Section 4.19 of the Credit Agreement shall be deemed to exclude
     the Specified Events of Default.

          (d) Each of the Borrower and the  Guarantors  represents  and warrants
     that:  (i) Schedule 2 sets forth the names of all the  Subsidiaries  of the
     Borrower  on the date  hereof;  (ii) Part A of  Schedule  3 sets  forth the
     addresses  of the chief  executive  offices of the Borrower and each of the
     Guarantors  and Part B of Schedule 3 sets forth the  addresses of all other
     U.S. places of business of the Borrower and each of the  Guarantors;  (iii)
     Schedule 4 sets forth all of the locations  (other than locations listed on
     Schedule 3) where the Borrower or any Guarantor  maintains books or records
     relating  to any  Accounts;  (iv)  Schedule  5 sets  forth  all of the U.S.
     locations  (other  than  locations  listed  on  Schedule  3 or 4) where the
     Borrower or any  Guarantor  maintains  any  Inventory;  (v) Schedule 6 sets
     forth the names and  addresses  of all Persons  other than the Borrower and
     the  Guarantors  who have (or at any time in the past four months have had)
     possession of any of the  Borrower's  or any  Guarantor's  Inventory;  (vi)
     Schedule 7 sets forth the name and  location  of each  bailee  with whom or
     where  Inventory  has been lodged at any time during the past four  months;
     and (vii)  Schedule  8 sets  forth all of the  names and  locations  of the
     financial  institutions at which the Borrower or any Guarantor maintains an
     Operating Account (as defined in the Security Agreement).

          (e) The Borrower agrees that on the last Domestic Business Day of each
     month,  commencing  on the last  Domestic  Business  Day of June 2001,  the
     Borrower shall pay to the Agent an amount in cash in immediately  available
     funds equal to at least  $1,000,000  to be held by the Agent in the General
     Collateral   Account  to  secure  the  payment  of  any  LC   Reimbursement
     Obligations arising from amounts drawn under the Outstanding LC's.

          (f) The  Borrower  agrees that on or before  November  30,  2001,  the
     Borrower shall either (a) pay to the Agent an amount in cash in immediately
     available  funds equal to (i) 105% of the  Aggregate LC Exposure  less (ii)
     the amount of cash collateral  already on deposit in the General Collateral
     Account,  to be held by the  Agent in the  General  Collateral  Account  to
     secure the payment of all LC Reimbursement Obligations arising from amounts
     drawn under the Outstanding LC's or (b) obtain for the benefit of the Agent
     on  behalf  of the  Lenders  a letter  of  credit,  in form  and  substance
     satisfactory  to the  Agent,  in a face  amount  equal  to (i)  105% of the
     Aggregate LC Exposure less (ii) the amount of cash collateral on deposit in
     the General  Collateral  Account,  which letter of credit (x) shall have an
     expiry  date not earlier  than the date 30 days after the final  expiration
     date of the  Outstanding LC having the latest  expiration  date, and (y) be
     available  for drawing by the Agent to reimburse the Issuer and the Lenders
     in respect of any LC Reimbursement  Obligations  arising from amounts drawn
     under the Outstanding LC's.

                                        3

<PAGE>

          (g) The  Borrower  acknowledges  and  agrees  that  (i) as of the date
     hereof,   the   aggregate   amount  of  the   Commitments   is  reduced  to
     $17,547,333.53  and (ii) from and after the date hereof, the Borrower shall
     have no right to  request,  and the  Lenders  and the  Issuer  shall not be
     obligated to make, issue or renew, as the case may be, any Loans or Letters
     of Credit; provided, however, that after the Effective Date the Issuer will
     issue at the request of the Borrower a new Letter of Credit in  replacement
     of that  certain  Letter of Credit in favor of HSBC Bank USA, as more fully
     described on Schedule 1 hereto.  Such replacement Letter of Credit (i) will
     have a stated  expiry date not later than the fifth  Domestic  Business Day
     before the Termination Date (as defined in the Credit Agreement), (ii) will
     not be  renewable  and  (iii)  will  otherwise  have  the  same  terms  and
     conditions  as the existing  Letter of Credit,  with such changes as may be
     mutually agreeable to the Issuer, Borrower and HSBC Bank USA.

          (h) The Borrower  hereby agrees that,  from and after the date hereof,
     and until such time as the  requirements  of paragraph  (f) above have been
     satisfied in full, the LC Fee Rate applicable to the Outstanding LC's shall
     be increased by 2.0% per annum.

          (i) From and after the date hereof the Borrower  shall comply with the
     requirements of Section  5.01(g)(ii) of the Credit Agreement  providing for
     the  delivery to the Lenders of a Borrowing  Base  Management  Report on or
     prior to Wednesday  of each  calendar  week (or if such  Wednesday is not a
     Domestic Business Day, the next succeeding Domestic Business Day).

          (j) The Borrower  acknowledges and agrees that upon the earlier of (i)
     the  occurrence  of an Event of Default  and (ii) the date which is 90 days
     after  the   Effective   Date,  if  the  Borrower  has  not  satisfied  the
     requirements  of paragraph (f) above in full on or prior to such date,  the
     Agent will engage at the Borrower's  expense,  an appraiser (such appraiser
     to be chosen by the Collateral  Agent in its sole  discretion from the list
     set  forth  on  Schedule  9  hereto)  to  perform  an  appraisal  of the IP
     Collateral and the Borrower will cooperate with such appraiser by providing
     to it all  documents,  analyses,  information  and other  materials  in the
     possession  of or  reasonably  available  to  the  Borrower  or  any of its
     Subsidiaries pertaining to the IP Collateral.

         This Waiver Agreement  constitutes a Loan Document under and as defined
in the Credit Agreement,  the Collateral  Documents and each other Loan Document
and each IP Security  Document  constitutes a Collateral  Document  under and as
defined in the Credit Agreement and each other Loan Document. The failure of any
of the representations and warranties  contained in paragraphs (a), (b), (c) and
(d) above to be true and correct in all material  respects  will  constitute  an
Event of Default under Section 6.01(d) of the Credit  Agreement,  the failure of
the Borrower or any Guarantor to comply with any of the agreements  contained in
paragraphs  (e),  (f) and (j) above will  constitute  an Event of Default  under
Section  6.01(b) of the Credit  Agreement  and the  failure of the  Borrower  to
comply with the  requirements of paragraph (i) above will constitute an Event of
Default under Section  6.01(c) of the Credit  Agreement,  provided that the cure
period referred to in Section 6.01(c) of the Credit Agreement will be reduced to
seven (7) days with respect to such Event of Default.

                                        4

<PAGE>

     SECTION 5. Conditions to  Effectiveness.  The  effectiveness of this Waiver
Agreement  shall be subject to the prior or concurrent  satisfaction  of each of
the conditions precedent set forth in this Section 5.

          (a) Receipt by the Agent of counterparts of this Waiver Agreement duly
     executed and  delivered by the  Borrower,  each  Guarantor and the Required
     Lenders.

          (b) The  representations  and warranties set forth in Section 4 hereof
     shall, in each case, be true and correct in all respects.

          (c) No Default or Event of Default, other than the Specified Events of
     Default, shall have occurred and be continuing.

          (d) The  Agent  shall  have  received  counterparts  of the  Copyright
     Security  Agreement and the Trademark Security Agreement executed on behalf
     of each Obligor which is a party  thereto,  together with all documents and
     instruments,   including,  without  limitation,   Uniform  Commercial  Code
     financing  statements and documents in proper form for recordation with the
     United States Patent and Trademark  Office and the United States  Copyright
     Office,  required by law or reasonably  requested by the Agent to be filed,
     registered or recorded to create or perfect the security interests intended
     to be created under the IP Security Documents.

          (e) The  Borrower  shall  have  paid to the Agent an amount in cash in
     immediately  available  funds equal to at least  $2,000,000  (including any
     amount currently on deposit in the General  Collateral  Account on the date
     hereof) to be held by the Agent in the General Collateral Account to secure
     the payment of any LC Reimbursement  Obligations arising from amounts drawn
     under the Outstanding LC's.

          (f) All  documents  executed  or  submitted  pursuant  hereto by or on
     behalf of the  Borrower or any of its  Subsidiaries  or any other  Obligors
     shall be reasonably satisfactory in form and substance to the Agent and its
     counsel; and the Agent and its counsel shall have received all information,
     approvals,  opinions,  documents or instruments as the Agent or its counsel
     may have reasonably requested.

     SECTION 6. Continuing  Effect of the Credit Agreement.  The Borrower,  each
Guarantor,  the Agent,  the Collateral  Agent, the Issuer and each Lender hereby
acknowledge  and agree that the Credit  Agreement shall continue to be and shall
remain  unchanged  and in full  force and effect in  accordance  with its terms,
except as expressly waived or modified hereby.

                                        5

<PAGE>

     SECTION 7. No  Limitation  on Remedies.  The  Borrower  and each  Guarantor
hereby  acknowledge  and agree  that,  upon the  Termination  Date,  the  waiver
provided in Section 2 hereof  shall become of no force and effect and the Agent,
the  Collateral  Agent,  the Issuer and the Lenders shall be free, in accordance
with  the  Credit  Agreement  and the  other  Loan  Documents,  to  declare  the
Obligations to be due and payable and to exercise and enforce,  or to take steps
to exercise and  enforce,  all other  rights,  powers,  privileges  and remedies
available  to them  under the  Credit  Agreement,  any other  Loan  Document  or
applicable  law on account  of the  Specified  Events of  Default  (or any other
Default or Event of Default) as if this Waiver  Agreement  had not been  entered
into by the parties hereto.

     SECTION  8. No  Waiver;  Other  Defaults  or  Events  of  Default.  Nothing
contained  in this Waiver  Agreement  shall be construed  or  interpreted  or is
intended as a waiver of or  limitation  on any  rights,  powers,  privileges  or
remedies that the Agent, the Collateral Agent, the Issuer or the Lenders have or
may have under the Credit Agreement or any other Loan Document on account of any
Event of Default (other than the Specified Events of Default).

     SECTION 9.  Payment of Fees and  Expenses.  The  Borrower  agrees to pay or
reimburse the Agent promptly  after demand for all its reasonable  out-of-pocket
costs and expenses  incurred in connection with the preparation and execution of
this Waiver Agreement,  including,  without limitation,  the reasonable fees and
disbursements of counsel to the Agent.

     SECTION  10.  Counterparts.  This Waiver  Agreement  may be executed by the
parties  hereto  in any  number  of  separate  counterparts,  and  all  of  said
counterparts  taken  together  shall be  deemed to  constitute  one and the same
instrument.

     SECTION  11.  GOVERNING  LAW.  THIS  WAIVER  AGREEMENT  AND THE  RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS WAIVER AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE  WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

     SECTION 12.  Reservation of Rights.  Notwithstanding  anything contained in
this  Waiver  Agreement  to  the  contrary,  the  Borrower  and  each  Guarantor
acknowledges that the Agent and the Lenders do not waive, and expressly reserve,
the right to exercise,  at any time after the date hereof,  any and all of their
rights and  remedies  under the Credit  Agreement,  any other Loan  Document and
applicable  law in  respect of any  Default  or Event of Default  other than the
Specified Events of Default.

     SECTION 13.  Consent of Guarantors.  Each Guarantor  hereby (i) consents to
the transactions  contemplated  hereby and (ii) acknowledges and agrees that the
guarantees (and all security therefor) contained in the Credit Agreement and the
Collateral  Documents  are,  and shall  remain,  in full force and effect  after
giving effect to this Waiver Agreement and all other prior  modifications to the
Credit Agreement.

SECTION 14.       Releases; Indemnities.

          (a) In further  consideration of the Agent's,  the Collateral Agent's,
     the  Issuer's  and the Lenders'  execution  of this Waiver  Agreement,  the

                                        6

<PAGE>

     Borrower and each of the Guarantors (collectively,  the "Releasors") hereby
     release the Agent, the Collateral Agent, the Issuer,  the Lenders and their
     direct and indirect stockholders and other affiliates, officers, employees,
     directors  and  agents  (collectively,  the  "Releasees")  from any and all
     claims, demands, liabilities, responsibilities,  disputes, causes of action
     (whether at law or in equity) and  obligations of every nature  whatsoever,
     whether liquidated or unliquidated, known or unknown, matured or unmatured,
     fixed or contingent  (collectively,  the "Claims") that the Borrower or any
     other Releasor may have against Releasees,  arising from or relating to any
     actions or  inactions  of  Releasees  on or prior to the date  hereof  with
     respect  to the Credit  Agreement,  any of the other  Loan  Documents,  the
     Obligations,  the Collateral,  any other property securing the Obligations,
     or this Waiver  Agreement,  including  any action  taken by any Releasee to
     enforce its rights or remedies,  including  any right of set-off or similar
     remedy hereafter undertaken.  For purposes of the release contained in this
     paragraph, the terms "Borrower" and "Guarantors" shall also include each of
     their respective successors and assigns, including, without limitation, any
     trustee,  receiver  or other  representative  acting  on behalf of any such
     person.

          (b) The Borrower and the  Guarantors  agree that their  obligations to
     indemnify and hold Releasees  harmless as set forth in Section 10.03 of the
     Credit  Agreement  shall  include  any  and all  liabilities,  obligations,
     losses,   penalties,   actions,   judgments,   suits,  costs,  expenses  or
     disbursements of any kind or nature  whatsoever  incurred by Releasees,  or
     any of them, whether direct,  indirect or consequential,  as a result of or
     arising from or relating to any  proceeding  by or on behalf of any person,
     including,  without  limitation,  present  or former  officers,  directors,
     agents,  trustees,  creditors,  partners or shareholders of the Borrower or
     any of the Guarantors, whether threatened or initiated, asserting any claim
     or legal or equitable  remedy under any statute,  regulation  or common law
     principle,  arising  from  or  relating  to the  negotiation,  preparation,
     execution,  delivery,  performance,  administration and enforcement of this
     Waiver Agreement or any other document or instrument executed in connection
     herewith.  The foregoing indemnity shall survive the payment in full of the
     Obligations and the Credit Agreement.

                                        7

<PAGE>

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Waiver
Agreement to be duly executed and delivered by their proper and duly  authorized
officers as of the date first above written.

                               MARVEL ENTERPRISES, INC.,
                                       as Borrower

                               By      /s/
                                      ---------------------------
                                      Name  Allen S. Lipson
                                      Title Executive Vice President, Business

                                            & Legal Affairs

                               MARVEL ENTERTAINMENT GROUP, INC.,
                                       as Guarantor

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

                               MEI HOLDING COMPANY S CORP.,
                                       as Guarantor

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

                               MEI HOLDING COMPANY F CORP.,
                                       as Guarantor

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

                                        8

<PAGE>

                               MARVEL CHARACTERS, INC.,
                                       as Guarantor

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

                               MARVEL RESTAURANT VENTURE CORP.,
                                       as Guarantor

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

                             MRV, INC., as Guarantor

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

                               CITIBANK, N.A., as Agent and Collateral Agent

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

                               CITIBANK, N.A., as Issuer

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

                                        9

<PAGE>

                               CITIBANK, N.A., as Lender

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

                               HELLER FINANCIAL, INC., as Lender

                               By       /s/
                                      --------------------------
                                      Name   Tara Urobel
                                      Title  Vice President

                             AMSOUTH BANK, as Lender

                               By

                                      ---------------------------
                                      Name
                                      Title

                                       10

Schedule 1  Outstanding LC's
Schedule 2  Subsidiaries
Schedule 3  Chief Executive Offices
Schedule 4  Location of Books and Records
Schedule 5  U.S. Locations of Inventory
Schedule 6  Persons who have possession of Inventory
Schedule 7  Bailees
Schedule 8  Operating Accounts
Schedule 9  List of Appraisers

The schedules shall be funished supplementary to the Commission upon request.Exhibit 10.2

                          COPYRIGHT SECURITY AGREEMENT

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

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

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

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

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

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

                                    ARTICLE I

                               SECURITY INTERESTS

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

<PAGE>

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

                                   ARTICLE II

                    SPECIAL PROVISIONS CONCERNING COPYRIGHTS

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

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

     2.2  Representations  and  Warranties.  Each Grantor hereby  represents and
warrants that: (a) Schedule I hereto sets forth each primary  Copyright in which
any Grantor has any ownership  interest  which is of material  economic value to
such Grantor  (each,  a "Material  Copyright"  and  collectively,  the "Material
Copyrights"), it being agreed and understood for purposes hereof that only those
Copyrights  which are  currently  the subject of a  television  or film  license
agreement will be deemed to be a Material  Copyright;  (b) to the best knowledge
of the Grantors,  except as set forth on Schedule I, each Material  Copyright is
valid, subsisting,  unexpired and enforceable and has not been abandoned; (c) to
such Grantor's knowledge, no holding,  decision or judgment has been rendered by
any  Governmental  Authority with respect to any Material  Copyright which would
limit, cancel or question the validity of any Material Copyright; and (d) except
as set forth on Schedule I, no action or  proceeding  is pending or, to the best
knowledge of the Grantors,  threatened (i) seeking to limit,  cancel or question

                                       2

<PAGE>

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

     2.3 Covenants.  Each Grantor covenants and agrees with the Collateral Agent
and the Lenders that,  from and after the date of this Security  Agreement until
the  Obligations  are paid in full, the Commitments are terminated and either no
Letters of Credit are outstanding or each outstanding  Letter of Credit has been
cash  collateralized or supported by a third-party  letter of credit as required
pursuant to the Waiver Agreement: (a) each Grantor (i) will employ each Material
Copyright for each material  published work with such notice of copyright as may
be required by law to secure  copyright  protection and (ii) will not do any act
or  knowingly  omit to do any act  whereby  any  Material  Copyright  may become
invalidated and:

          (A) will not do any act, or omit to do any act,  whereby any  Material
     Copyright is reasonably likely to become injected into the public domain;

          (B) shall notify the Collateral Agent  immediately if it knows, or has
     reason to know, that any Material  Copyright is reasonably likely to become
     injected into the public domain or of any materially adverse  determination
     or development (including,  without limitation,  the institution of, or any
     such  determination  or development in, any court or tribunal in the United
     States) regarding such Grantor's  ownership of any such Material  Copyright
     or its validity;

          (C) will take all necessary steps as it shall deem  appropriate  under
     the  circumstances,  to maintain and pursue each application (and to obtain
     the  relevant  registration)  and to  maintain  each  registration  of each
     Material  Copyright owned by such Grantor  including,  without  limitation,
     filing of applications for renewal, where necessary; and

          (D)  will  promptly  notify  the  Collateral  Agent  of  any  material
     infringement of any Material  Copyright of such Grantor of which it becomes
     aware and will take such actions as it shall  reasonably  deem  appropriate
     under the  circumstances  to protect such  Material  Copyright,  including,
     where  appropriate,   the  bringing  of  suit  for  infringement,   seeking
     injunctive  relief  and  seeking to recover  any and all  damages  for such
     infringement,  except  where  such  action  would be of  negligible  value,
     economic or otherwise.  Each Grantor will not do any act, or omit to do any
     act, whereby any Material Copyright may become abandoned or dedicated.

     2.4 Collateral Agent's Appointment as Attorney-in-Fact. Each Grantor hereby
irrevocably  constitutes  and appoints the  Collateral  Agent and any officer or
agent  thereof,  with  full  power  of  substitution,  as its  true  and  lawful
attorney-in-fact  with full  irrevocable  power and  authority  in the place and
stead of such Grantor and in the name of such  Grantor or in its own name,  from
time to time after the occurrence,  and during the continuation,  of an Event of
Default in the Collateral  Agent's  discretion,  for the purpose of carrying out
the terms of this Security Agreement, to take any and all appropriate action and
to execute any and all  documents  and  instruments  which may be  necessary  or

                                       3

<PAGE>

desirable to accomplish the purposes of this Security  Agreement,  and,  without
limiting  the  generality  of the  foregoing,  each  Grantor  hereby  gives  the
Collateral Agent the power and right, on behalf of such Grantor,  without notice
to or assent by such Grantor, to do the following:

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

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

     (c) (i) to  direct  any  party  liable  for any  payment  under  any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Collateral Agent or as the Collateral  Agent shall direct;  (ii)
to ask or demand for,  collect,  receive payment of and receipt for, any and all
moneys,  claims and other amounts due or to become due at any time in respect of
or arising out of any  Collateral;  (iii) to commence and  prosecute  any suits,
actions  or  proceedings  at  law  or  in  equity  in  any  court  of  competent
jurisdiction  to collect the  Collateral or any thereof and to enforce any other
right  in  respect  of any  Collateral;  (iv) to  defend  any  suit,  action  or
proceeding  brought against such Grantor with respect to any Collateral;  (v) to
settle,  compromise or adjust any suit, action or proceeding described in clause
(iv) above upon  reasonable  terms and, in  connection  therewith,  to give such
discharges or releases as the Collateral Agent may deem reasonably  appropriate;
(vi) to assign any  Copyright  throughout  the world for such term or terms,  on
such  conditions,  and in such  manner,  as the  Collateral  Agent  shall in its
reasonable discretion determine; and (vii) generally, to sell, transfer,  pledge
and make  any  agreement  with  respect  to or  otherwise  deal  with any of the
Collateral  as fully and  completely  as though  the  Collateral  Agent were the
absolute owner thereof for all purposes,  and to do, at the  Collateral  Agent's
option and such Grantor's  expense,  at any time, or from time to time, all acts
and things which the Collateral  Agent  reasonably  deems  necessary to protect,
preserve  or realize  upon the  Collateral  and the  Collateral  Agent's and the
Lenders' Liens thereon and to effect the intent of this Security Agreement,  all
as fully and effectively as such Grantor might do.  Notwithstanding  anything to
the contrary  contained herein, the Collateral Agent shall give such Grantor not
less  than ten days  prior  written  notice of the time and place of any sale or
other intended disposition of any of the Collateral.

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

     2.5  Remedies.  If an Event of Default shall occur and be  continuing,  the
Collateral Agent on behalf of the Lenders may exercise, in addition to all other
rights and remedies granted to them in this Security  Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured  party under the Code (whether or not in effect

                                       4

<PAGE>

in the  jurisdiction  where such rights are  exercised).  Without  limiting  the
generality of the foregoing, the Collateral Agent, without demand of performance
or other  demand,  presentment,  protest,  advertisement  or  notice of any kind
(except any notice  provided  herein or as may be  required  by law  referred to
below)  to or upon  any  Grantor  or any  other  Person  (all  and each of which
demands,  defenses,  advertisements and notices are hereby waived),  may in such
circumstances  forthwith  collect,  receive,  appropriate  and realize  upon the
Collateral,  or any part thereof,  and/or may forthwith  sell,  assign,  give an
option  or  options  to  purchase,  or  otherwise  dispose  of and  deliver  the
Collateral or any part thereof (or contract to do any of the foregoing),  in one
or more parcels at public or private sale or sales,  at any  exchange,  broker's
board or office of the  Collateral  Agent or any Lender or  elsewhere  upon such
terms and  conditions as it may deem advisable and at such prices as it may deem
best,  for cash or on credit or for future  delivery  without  assumption of any
credit risk.  The  Collateral  Agent or any Lender shall have the right upon any
such public sale or sales,  and, to the extent  permitted by law,  upon any such
private sale or sales,  to purchase the whole or any part of the  Collateral  so
sold, free of any right or equity of redemption in each Grantor,  which right or
equity is hereby waived and released.  The Collateral  Agent shall apply the net
proceeds of any such collection,  recovery, receipt, appropriation,  realization
or sale,  after  deducting  all  reasonable  costs and  expenses  of every  kind
incurred  therein  or  incidental  to  the  care  or  safekeeping  of any of the
Collateral  or in any  way  relating  to the  Collateral  or the  rights  of the
Collateral  Agent and the  Lenders  hereunder,  including,  without  limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the  Obligations,  in such order as the Collateral  Agent may elect, and only
after such  application  and after the  payment by the  Collateral  Agent of any
other amount required by any provision of law,  including,  without  limitation,
Section  9-504(1)(c)  of the Code,  need the  Collateral  Agent  account for the
surplus,  if any, to the Grantors.  To the extent  permitted by applicable  law,
each Grantor waives all claims,  damages and demands it may acquire  against the
Collateral Agent or any Lender arising out of the exercise by them of any rights
hereunder,  except to the extent  arising from the gross  negligence  or willful
misconduct of the Collateral  Agent or such Lender.  If any notice of a proposed
sale or other  disposition  of Collateral  shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition. The Grantors shall remain liable for any deficiency if the
proceeds of any sale or other  disposition of the Collateral are insufficient to
pay the Obligations and the fees and disbursements of any attorneys  employed by
the Collateral Agent or any Lender to collect such deficiency.

                                   ARTICLE III

                                   DEFINITIONS

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

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

                                       5

<PAGE>

                  "Copyright  License"  means any  written  agreement,  naming a
         Grantor,  as licensor  or  licensee,  granting  any right in the United
         States to use any Copyright including, without limitation, any referred
         to in Schedule I hereto.

                  "Copyrights"  means all of the  following  to the  extent  any
         Grantor now or  hereafter  has any right,  title or  interest:  (a) all
         United  States   copyrights  and  all  registrations  and  applications
         therefor,  including, without limitation, any referred to in Schedule I
         hereto, and (b) all renewals of such copyrights.

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

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

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

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

                                       6

<PAGE>

                                   ARTICLE IV

                                  MISCELLANEOUS

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

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

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

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

     4.5 No Waiver;  Cumulative  Remedies.  Neither  the Agent,  the  Collateral
Agent,  the  Issuer  nor any  Lender  shall  by any  act  (except  by a  written
instrument pursuant to Subsection 4.6 hereof),  delay,  indulgence,  omission or
otherwise  be deemed to have  waived  any right or remedy  hereunder  or to have

                                       7

<PAGE>

acquiesced  in any  Default  or Event of  Default or in any breach of any of the
terms  and  conditions  hereof.  No  failure  to  exercise,  nor  any  delay  in
exercising,  on the part of the Agent,  the Collateral  Agent, the Issuer or any
Lender,  any  right,  power or  privilege  hereunder  shall  operate as a waiver
thereof.  No  single  or  partial  exercise  of any  right,  power or  privilege
hereunder shall preclude any other or further  exercise  thereof or the exercise
of any other right,  power or privilege.  A waiver by the Agent,  the Collateral
Agent,  the  Issuer or any  Lender of any right or remedy  hereunder  on any one
occasion shall not be construed as a bar to any right or remedy which the Agent,
the  Collateral  Agent,  the Issuer or such Lender would  otherwise  have on any
future occasion. The rights and remedies herein provided are cumulative,  may be
exercised singly or concurrently and are not exclusive of any rights or remedies
provided by law.

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

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

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

     4.9  Authority of  Collateral  Agent.  Each Grantor  acknowledges  that the
rights  and  responsibilities  of  the  Collateral  Agent  under  this  Security
Agreement  with  respect  to any  action  taken by the  Collateral  Agent or the
exercise or non-exercise by the Collateral Agent of any option,  right, request,
judgment or other right or remedy  provided  for herein or  resulting or arising
out of this Security  Agreement  shall, as between the Collateral  Agent and the
Lenders,  be governed by the Credit  Agreement and by such other agreements with
respect  thereto as may exist from time to time among them,  but, as between the
Collateral  Agent and the Grantors,  the Collateral  Agent shall be conclusively

                                       8

<PAGE>

presumed to be acting as agent for the Lenders with full and valid  authority so
to act or  refrain  from  acting,  and  the  Grantors  shall  not be  under  any
obligation, or entitlement, to make any inquiry respecting such authority.

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

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

                                       9

<PAGE>

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

                                MARVEL ENTERPRISES, INC.,
                                   as Borrower

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

                                                & Legal Affairs

                                MARVEL ENTERTAINMENT GROUP, INC.,
                                  as Guarantor

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

                                MEI HOLDING COMPANY S CORP.,
                                  as Guarantor

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

                                MEI HOLDING COMPANY F CORP.,
                                  as Guarantor

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

                                 MARVEL CHARACTERS, INC.,
                                  as Guarantor

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

                                       10

<PAGE>

                                 MARVEL RESTAURANT VENTURE CORP.,
                                  as Guarantor

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

                                 MRV, INC., as Guarantor

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

                                 CITIBANK, N.A., as Collateral Agent

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

                                       11

<PAGE>

                                 ACKNOWLEDGMENT

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

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

                                                          Notary Public
                                                     My commission expires:

                SCHEDULE I TO THE COPYRIGHT SECURITY AGREEMENT

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

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